CFP/Private Wealth

Does anyone else find the CFA information backward to what really happens in society. I work with people in the US with 5-30 million NWs and they are the exact opposite of what they describe in these books. Most of them what to take the least amount of risk possible. Am I just not getting it?

I think the same thing sometimes, fatafut23. It depends though on the client personality. Those I know who “worked up the ladder” and retired wealthy feel like they have won the lottery already and don’t want to take risk beyond what is absolutely necessary to meet their minimum growth objectives. Entrepreneurs who built their business from the ground up tend to have more confidence in their instincts and abilities. They are more comfortable with risk, but also less comfortable with advice. The trust fund kids seem the most eager to speculate, since they feel like they are playing with other people’s money. In short, I think it depends on the type of person with whom you’re dealing. I see evidence of all investor types and all behavioural biases at my job.

Yeah I agree with you in context of the test but I think reality is very different. For example I have a client who sold 1/3 of his company that he started from scratch. According to the CFA he should be willing to take on some risk however he wants to be ultra conservative. And for the most part enrepreneurs who still have a business want to have their personal assets more conservative since they are taking on all this risk with their business. But I ll drink the kool-aid for the test.