If you were to ask what the biggest trend in our clients’ spending habits has been over the last couple of years, this sentence would probably be at the top of the list. Campervans aren’t cheap – typical withdrawals from a portfolio, following this statement, are between £30,000 and £60,000.

Most of the campervans weren’t in our clients’ original retirement spending plans, and usually the sentence is in the past tense! That’s not to say that you should be asking our permission before making a big purchase (though it might help if we could have a bit of notice!). Thankfully, although campervans don’t generally keep their original value, they don’t tend to lose their entire value, unless you keep them for a long time!

Fortunately, the boffins at Oxford Risk have come up with an additional measure of your financial personality to help identify if you will be a future campervan purchaser; as well as testing your risk tolerance, composure and confidence levels, alongside your views about ethical investing, they now include a measure of “impulsivity”. If you are reading this post and thinking “hang on, I’m one of the clients who bought a campervan”, it would be interesting if you could re-take our financial personality test to see what your impulsivity score is!

The impulsivity measure is useful for us and for you.

• For us, it helps us to design your portfolio better, with your personality traits in mind. So, if you are impulsive, it may be better for you to have a larger allocation to cash or investments which shouldn’t fluctuate in value too much, so the funds are there for the campervan (or any other impulsive purchase).
• For you, it may help to recognise your own personality. Frankly, it may help you to stop and think before you make a big purchase. We’re always open to a conversation about “if I buy this, will it mess up my retirement plans?”; we can help you to look at how it might affect your retirement income, expenditure, assets and liabilities and explain the impact, so you can make an informed decision.

But it’s not the only development in the world of financial personality assessment. Oxford Risk now also help us to understand to what extent you prefer familiar investments. This is another refinement of the financial personality assessment, which may help to understand how you might react to certain investments, which is useful, both for you and for us.

Many advisers still simply assign one risk score to each of their clients when recommending investment portfolios to them. It’s obviously wrong (and possibly a bit rude) to describe a financial personality by reference to just one number; our personalities are all multi-dimensional!

Oxford Risk’s recent upgrades represent a big improvement in the quality of financial personality assessment, and they deserve credit for taking the initiative and challenging the competition to improve.

Our view remains that, like your overall personality, your financial personality only changes gradually over time. We’d be worried if you swung from being cautious to risk taking every few months! However, personalities do change over the years, so it is useful to check whether you have changed, from time to time. If you would like us to re-assess your financial personality, including the dimensions of impulsivity and familiarity, just let us know and we’ll send you the questionnaire which is the starting point of our assessment.

Philip Wise | philip@sussexretirement.co.uk

Managing Director and Chartered Financial Planner

This blog is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.