Risk Management & Risk Assessment

An experienced financial services leader, Lisa Detanna is an award-winning senior vice president at Raymond James in California. Recognized several times as a Top Advisor by Barron's and Forbes, Lisa Detanna provides affluent families and individuals with wealth management services that include risk management.

“Risk” refers to the likelihood that a specific hazard will occur, whether in business, finance, or a different field. It arises from a number of sources, including legal liabilities, credit risk, and fallout from a damaged reputation. Dealing with risk involves both risk management and risk assessment, two related terms that many people use interchangeably.

“Risk management” is an umbrella term that encompasses assessing, prioritizing, analyzing, and strategizing to minimize risk. It is a continuing process geared toward mitigating the negative effects of loss caused by risk exposure at the macro level.

The process of completing risk management involves risk assessment. Risk assessment is a meso-level process that places risks into identifiable categories so that the impact of each may be more easily defined.

Three components make up risk assessment: risk identification, risk evaluation, and risk analysis. Through these respective processes, professionals evaluate risks in terms of how they are best handled; categorize risks as either low, medium, or high; and find the probability of each risk occurring. These three steps fit together and must be completed as part of an effective risk assessment process.