Combining quant-finance techniques with decades of behavioural-science research, the new Compass technology aims to better understand investors, improve their financial decisions and match them to suitable investments.
The firm hopes the suite helps advisers and investors to navigate investment complexity by accounting for an investor’s psychology, circumstances, emotions, and financial understanding.
The firm says its tools “quantify what could only be guessed at before, removing the need to rely on subjective workarounds.
“Not only do they enhance client understanding, but also improve client engagement, ensure greater consistency of advice, and future-proof compliance processes.”
Oxford Risk believes that suitability requires a robust set of tools that “recognises the humanity of both advisers and investors and works with them, helping to improve decisions by applying the insights of behavioural science and making the most of supportive, expert technology.”
Greg Davies, who joined Oxford Risk after a decade as head of behavioural and quant finance at Barclays Wealth, designed the suite of tools.
He said: “Compass moves beyond a narrow view of what it means to own a good investment portfolio, to a wider view of what it means to be a good investor.
“Just as it would be remiss to prescribe medical care without considering their lifestyle and goals, it is remiss when giving financial advice to focus on investment solutions without giving the same attention to the psychology and emotional comfort of the investor.”
“Good investment outcomes require managing the investor, not just managing investments.”
Oxford Risk CEO, Marcus Quierin, added: “A suitability approach that pays proper scientific attention to each investor’s unique circumstances and the behaviours they employ in the search for emotional comfort, is long overdue.”
“I’m pleased to be able to announce that we’re launching a full set of tools to do just this, and moreover one that is designed to be built into an adviser’s existing systems and not bolted on.
“We see suitability as a chance to provide a supporting structure within which advisers can operate better, rather than obstacles that get in their way.”