Risk profiling is the process of assessing an individual's or organization's risk tolerance, identifying potential risks, and determining the level of risk that is acceptable

In financial services, risk profiling is typically used to guide investment decisions. Investors may be classified into different risk profiles, such as conservative, moderate, or aggressive, depending on their risk tolerance. A conservative investor may prefer low-risk investments such as government bonds, while an aggressive investor may prefer higher-risk investments such as stocks.