Conversation Stoppers
Zsuzsanna Vargha · Oxford University Press eBooks · 2016
Financial regulation in the UK requires that firms assess their customers’ Attitude to Risk (ATR) to offer suitable advice. This chapter shows, however, that ATR is not a pre-existing property of the consumer to be extracted and matched with investments. Rather it emerges from the face-to-face advising process and solidifies as regulatory fact. Studying how this takes place, we can identify two contrasting styles of riskwork. Large retail banks use standardized psychometric questionnaires which interrupt the advisory conversation but yield a documented result. For wealth managers, however, risk preference is revealed in hindsight, emerging in fluid client–adviser interaction, involving routine classifying work and graphical illustrations which constitute financial planning. Meanwhile, principles-based regulation legitimates practices that can produce auditable objects. This gives rise to disputes over the nature of risk preference and the value of the advising relationship.