Typical risk questionnaires aimed at helping advisors guide investors are deficient in five ways. First, each investor has a multitude of risk tolerances, one for each goal and its mental account. Probes for one global risk tolerance miss that multitude. Second, the links between answers to...

The crisis of 2008 and 2009 exposed not only the shortcomings of our financial system but also the shortcomings of the tools used by financial advisors to assess and guide investors. These include risk questionnaires. Many investors who were assessed as risk tolerant in 2007 and assigned...