During our lives, our risk appetite tends to change. Depending on the remaining period to your retirement, your level of financial security, and the amount of growth you envisage realising from your investments, a risk profile can be ascertained. With employer-based pensions, you are likely to have been placed into a default investment solution which may be taking too much or too little risk for your personal circumstances. We recommended the risk profile of your pension is reassessed every year to ensure that your retirement objectives are likely to be met. After carefully reviewing your risk profile, you will be able to align your investments to match with the risk level you are comfortable with.
Obviously, putting all your eggs in one basket is a precarious investment approach. For this reason, it is always advisable to diversify your portfolio to help spread the risk. When reviewing a pension, an investor who has exclusively placed money in funds run by one company or invested in one asset class may wish to make some fundamental changes to their portfolio.