The Risk Capacity Index (RCI) is a unique way of better assessing an individual's investment risk profile. The risk profile and the time frame for an investment goal (e.g. savings for retirement) play an important role in determining the suitable asset allocation for that investment goal. The risk profile establishes the investment risk and reward relationship for a person. The RCI application presents a set of simple questions. Based on the responses, this application computes the RCI score. The RCI score ranges represent five investment risk profiles, starting from most conservative (with the lowest level of potential risk) to most aggressive (highest potential risk/reward).

Traditional risk profiling tools focus primarily on the psychological aspects of a person e.g. what will be a person's reaction if the market went down by 20%. We know that responses to such questions are likely to change depending upon the market environment. The RCI methodology also looks at structural factors to reduce the volatility in a person's risk profile. For example, people with more stable income tend to carry a higher risk capacity as opposed to those with an unstable income.