SYM’s Wealth Management service engagement includes a comprehensive review of the various risk exposures that influence your financial well-being. Risk is typically defined as the possibility of harm, loss, injury, danger or destruction. Risk can be speculative, where the potential exists for either gain or loss; or pure, where only losses can result. Examples of pure risk are the perils of death, disability, fire, theft, accident and others. The potential for some degree of loss is an inherent quality of pure risk.
SYM’s Comprehensive Risk Review Process
SYM’s comprehensive review addresses risk by recognizing its hazards. Risk hazards are acts or conditions that increase the severity of a loss or cause it to happen in the first place. By shining light on seven areas of potential vulnerability, SYM helps identify opportunities to minimize the financial and personal impact of risk.
SYM will work with you to:
- Identify and evaluate the speculative and pure risks you may face;
- Identify and evaluate the potential losses associated with each risk factor;
- Formulate strategies to address risk hazards;
- Break down each strategy to actionable steps, working alongside your insurance professional or estate attorney to implement change or modify coverage;
- As your needs evolve over time, revisit your risk plan and alter when appropriate.
Strategies for Addressing Risk
The goal of a risk assessment is to equip you to behave in a way that is known and purposeful. Most of us employ one or more of the following strategies on an automatic basis, without much thought or reflection.
The first strategy, avoidance, can be the result of reflexive reaction or conscious choice. Avoidance removes the possibility of loss by declining to participate in activities with high risk exposure, like hang gliding or motorcycle racing.
A retention strategy is where one elects to live with a risk rather than take formal steps to avoid its consequences. Retention can be a solid strategy, but only when it’s employed with full awareness of possible outcomes and a “plan B” for mitigating potential loss. An example of retention strategy is choosing not to include roadside service on your auto insurance policy.
Risk transfer, the third strategy, is paying for protection against loss. When transferring risk, most often to an insurance company, premium payments serve to cover you against specific loss scenarios. One critical principle of effective risk management is transferring risk on losses you cannot afford to replace. Avoiding low frequency, high impact losses are the reasons we recommend umbrella liability coverage, homeowners’ insurance, and other specialized policies to many SYM clients.
As we work through the risk review process, your trusted, licensed insurance professional will be an important source of technical guidance. If you are not currently working with a trusted insurance professional, your advisor will be happy to make an introduction to a qualified local provider.