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According to the World Bank Development Research Group Report on average 65% of Northern Europeans Adults are Financial Literacy compared to southern Europe especially Romania at 22% Financial Literacy, Turkey at 24%, Norway at 71% the highest. Middle East Yemen Republic at 13%
Africa has Somalia at 15% the lowest Financial Literacy Rates Globally, Uganda at 34% with an average of
These major disparities ought to trigger a different approach to Investment Profiling as clearly the likelihood of someone having heard about Shares and Bonds in Somalia is 15% in UK its 65% of Adults.
Its become a standard practice to expect to fill out a Risk Questionnaire filled with Technical investment jargon about shares and Bonds and what the ideal choices should be and potential outcome.
The Risk Profile Questionnaire is designed to determine what investor profile we qualify for CONSERVATIVE | AGGRESSIVE Etc.
This method is perfect for those individuals that have heard or interacted with formal investment products like Shares, Bonds etc.
However, many potential investors hardly even know what shares and bonds are let alone the questions about if an investment produced $2000 or $25,000 in return what would you choose.
For a seasoned individual that has interacted with these instruments its fair to expect an honest answer to these questions, but for a novice its like asking them to predict the next head of state which is increasingly becoming difficult to predict more accurately.
Perhaps its time we reviewed the way we build and identify risk profiles as its easy to think an individual is risk profile A when in fact he is risk profile B.
From our research many potential investors are clueless about formal investment products like shares or bonds including technical investment jargon used in Risk Profile Questionnaires, but the same potential investors are aware of their Goals and their experiences with investments some of which are Lucky/Good or Unlucky/Bad experiences.
We built the CACTUS IQ ground up from this simple concept such as ones Age, Investment Experience and their Life Goals this is built to enable adoption of good money habits while avoiding bad money habits.