Portfolio Managers need to budget the risk of the portfolio they manage. Risk budgeting helps with all of the following reasons, except for:

Portfolio Managers may change the level of risk budgeted if the market conditions become favourable such after a severe market downturn.

Portfolio Managers may choose not to increase risk levels when allocating risk for Tactical Asset Allocation (TAA).

Portfolio Managers will allow a higher allocation to higher returning assets if the Risk budget allows for this increase.

Portfolio Managers are compensated based on the assets that they manage. Higher risk tolerance allows for higher investment levels.

Portfolio Managers may increase the risk levels of the selected investments to compensate for lower risk levels of the Strategic Asset Allocation (SAA).