--- title: "Forbes Finance Council: Understanding Financial Risk" description: Joe Elsasser, CFP®, highlights the importance of understanding financial risk for Forbes Finance Council. image: https://www.covisum.com/hubfs/forbes-logo-blog.jpg --- [Login](https://www.covisum.com/login-experience) | [Call: 402-235-4500](tel:1-402-235-4500) | [Contact Us](https://www.covisum.com/contact) ** [![covisum-logo](https://www.covisum.com/hs-fs/hubfs/covisum-logo.png?width=264&height=41&name=covisum-logo.png "covisum-logo")](https://www.covisum.com/) [![Start Your Free Trial](https://no-cache.hubspot.com/cta/default/2755909/b23743cd-d0df-4907-a66d-293b58ab1164.png)](https://cta-redirect.hubspot.com/cta/redirect/2755909/b23743cd-d0df-4907-a66d-293b58ab1164) [![Contact Us](https://no-cache.hubspot.com/cta/default/2755909/6c6d7fe7-e094-4fc0-9c82-d93d4ccbb532.png)](https://cta-redirect.hubspot.com/cta/redirect/2755909/6c6d7fe7-e094-4fc0-9c82-d93d4ccbb532) # Forbes Finance Council: Understanding Financial Risk [IN THE NEWS  |  ](https://www.covisum.com/blog/topic/in-the-news)5/15/19 8:48 AM  |  by [Lauren Laferla, Director of Communications](https://www.covisum.com/blog/author/lauren-laferla-pr-content-marketing-manager) # Why You Shouldn't Just Focus On The Probability Of Success In a recent article for [Forbes Finance Council](https://www.forbes.com/sites/forbesfinancecouncil/2019/05/09/understanding-financial-risk-why-you-shouldnt-just-focus-on-the-probability-of-success/#186cd3bc7e9b), Covisum Founder and President Joe Elsasser, CFP® suggested that focusing on a probability of success is a poor method for moving people to make the best possible financial decisions.  [![Forbes-Finance-Council_avatar_1523394886-136x136](https://www.covisum.com/hs-fs/hubfs/Graphics%20-%20Social%20Media/Forbes-Finance-Council_avatar_1523394886-136x136.jpg?width=136&name=Forbes-Finance-Council_avatar_1523394886-136x136.jpg)](https://www.forbes.com/sites/forbesfinancecouncil/2019/03/29/an-annual-checkup-can-keep-your-retirement-plan-healthy/#53998751554c)Many financial advisors incorporate Monte Carlo simulations, a technique used to demonstrate risk and a range of possible outcomes,  into their financial plans. Monte Carlo simulations can help consumers understand that a variety of outcomes are possible and avoid a false sense of security, but focusing on the probability of success can minimize the consequences of failure — an equally important consideration. > "If the focus of financial planning is to move people to the best possible decisions, advisers need to recognize that a probability of success is really a poor mechanism to do so. The reason: People don’t experience “probabilities” — they experience events. Focusing entirely on the probability of success tends to mask the consequences of failure, which for most people is a critical consideration." Evaluating the most common risk events, such as a significant market decline early in retirement or a long-term care event, is important. Consider each event and discuss with your client whether the consequences of failure are acceptable to them. If necessary, adjust the plan to bring those consequences into an acceptable range and find balance by utilizing different investment or withdrawal strategies or insurance. You can read the article in its entirety in [Forbes](https://www.forbes.com/sites/forbesfinancecouncil/2019/05/09/understanding-financial-risk-why-you-shouldnt-just-focus-on-the-probability-of-success/#53cea39a7e9b). --- Want help answering client questions about their retirement strategy? Are you looking for a tool that will help you create referable value in your practice? Income InSight® creates customized reports and charts that will help you show your clients what their retirement could look like and makes it easy to demonstrate the value your expertise adds to their plans. Try it free for 10-days. [![Get a 10-day free trial](https://no-cache.hubspot.com/cta/default/2755909/3cd676eb-b228-407f-8ebe-6c2f5912d8f8.png)](https://cta-redirect.hubspot.com/cta/redirect/2755909/3cd676eb-b228-407f-8ebe-6c2f5912d8f8) ### Share this article [![Share on Facebook](https://static.hubspot.com/final/img/common/icons/social/facebook-24x24.png)](http://www.facebook.com/share.php?u=https%3A%2F%2Fwww.covisum.com%2Fblog%2Fforbes-understanding-financial-risk%3Futm_medium%3Dsocial%26utm_source%3Dfacebook) [![Share on LinkedIn](https://static.hubspot.com/final/img/common/icons/social/linkedin-24x24.png)](http://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fwww.covisum.com%2Fblog%2Fforbes-understanding-financial-risk%3Futm_medium%3Dsocial%26utm_source%3Dlinkedin) [![Share on Twitter](https://static.hubspot.com/final/img/common/icons/social/twitter-24x24.png)](https://twitter.com/intent/tweet?original_referer=https%3A%2F%2Fwww.covisum.com%2Fblog%2Fforbes-understanding-financial-risk%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&url=https%3A%2F%2Fwww.covisum.com%2Fblog%2Fforbes-understanding-financial-risk%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&source=tweetbutton&text=Forbes%20Finance%20Council%3A%20Understanding%20Financial%20Risk) ## Related Blog Articles [ ### In The News Forbes Finance Council: Key Questions to Ask When Choosing a Niched Financial Advisor Read ](https://www.covisum.com/blog/forbes-finance-council-key-questions-to-ask-when-choosing-a-niched-financial-advisor) [ ### In The News Forbes Finance Council: Clearing Up Misconceptions About Social Security Read ](https://www.covisum.com/blog/forbes-clearing-up-misconceptions-about-ss) [ ### In The News Forbes Finance Council: The Truth About Portfolio Risk Exposure Read ](https://www.covisum.com/blog/forbes-finance-council-the-truth-about-portfolio-risk-exposure) [See All Articles](https://www.covisum.com/blog) ## Covisum’s ecosystem of solutions can help you grow. [Sign Up Free](https://idp.socialsecuritytiming.com/register) ## Stay Connected Access industry news, expert insights, best practices, free downloads and more. [![Logo-White-Stacked](https://www.covisum.com/hs-fs/hubfs/Logo-White-Stacked.png?width=124&height=146&name=Logo-White-Stacked.png "Logo-White-Stacked")](https://covisum.com) 444 Regency Parkway Dr. Suite 201 Omaha, NE 68114 - - - - Read Reviews of Our Solutions In: [![Footer Capterra Logo](https://www.covisum.com/hubfs/Capterra_logo%20(1).svg) ](https://www.capterra.com/p/203728/Tax-Clarity/reviews/)[![Footer G2 Logo](https://www.covisum.com/hubfs/logo-g2.png) ](https://www.g2.com/search?utf8=%E2%9C%93&query=covisum) [![Contact Us](https://no-cache.hubspot.com/cta/default/2755909/interactive-193539503962.png) ](https://www.covisum.com/hs/cta/wi/redirect?encryptedPayload=AVxigLJPn3JbtYBycy%2FsLt4jRDHW2XG1wHdqa1t9SzdmgC49dhhkP0QRnsRyN4tiQTyoQgMj3PfULjT0M2K7Jmd6uxViv%2FZlaLbkQu93Iuz768X%2BIMFisv8kd%2BQ2JknYMlQRRbJzgMZ%2BUL93qzwcQWArP%2FJDdz3vXVZFg6JRHDSyH4IVbmU%3D&webInteractiveContentId=193539503962&portalId=2755909) [![SOC 2 T2 Logo](https://no-cache.hubspot.com/cta/default/2755909/interactive-193539503801.png) ](https://www.covisum.com/hs/cta/wi/redirect?encryptedPayload=AVxigLKtGayjPHfXzTzEvUHi%2BWhaVsiiqXE%2BYkCQB2tuRdJ5Lxz7wtFPLM5P3wo5sZPV9PZgfmAEH0%2B6Xkjs2TweePWicmS7zACNs4yKOwjiMujkHYm6QgJyeNu5MNC%2Fe%2FabuBij2n3%2FqMveTOSYDpIHNwXzlxkp%2FI8T%2Bb6Tn61MdLeRYsNlTzts8YtYYXzu%2FZSAkwnChjoE&webInteractiveContentId=193539503801&portalId=2755909) © 2010 – 2026 Covisum®. All Rights Reserved. For advisor use only. Covisum is not connected with, affiliated with or endorsed by the United States government or the Social Security Administration. The local advisor offering Covisum products may be an insurance agent, financial advisor, accountant or attorney. Advisors may offer other products or services and are compensated by commissions and/or fees for any other services they may provide. [Terms and Conditions](https://www.covisum.com/terms-of-use) | [Privacy Policy](https://www.covisum.com/privacy-policy) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Lauren Laferla, Director of Communications", "url" : "https://www.covisum.com/blog/author/lauren-laferla-pr-content-marketing-manager" }, "dateModified" : "2019-05-15T13:48:11.306Z", "datePublished" : "2019-05-15T13:48:00.000Z", "headline" : "Forbes Finance Council: Understanding Financial Risk", "image" : [ "https://www.covisum.com/hubfs/forbes-logo-blog.jpg" ], "mainEntityOfPage" : { "@id" : "https://www.covisum.com/blog/forbes-understanding-financial-risk", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.covisum.com/hubfs/Covisum-Logo-Grey.png" }, "name" : "Covisum LLC" } } ```