Falls are the leading global cause of accidental death and disability in older adults and are the most common cause of injury and hospitalization. Accurate, early identification of patients at risk of falling, could lead to timely intervention and a reduction in the incidence of fall-related injury and associated costs. We report a statistical method for fall risk assessment using standard clinical fall risk factors (N = 748). We also report a means of improving this method by automatically combining it, with a fall risk assessment algorithm based on inertial sensor data and the timed-up-and-go test. Furthermore, we provide validation data on the sensor-based fall risk assessment method using a statistically independent dataset. Results obtained using cross-validation on a sample of 292 community dwelling older adults suggest that a combined clinical and sensor-based approach yields a classification accuracy of 76.0%, compared to either 73.6% for sensor-based assessment alone, or 68.8% for clinical risk factors alone. Increasing the cohort size by adding an additional 130 subjects from a separate recruitment wave (N = 422), and applying the same model building and validation method, resulted in a decrease in classification performance (68.5% for combined classifier, 66.8% for sensor data alone, and 58.5% for clinical data alone). This suggests that heterogeneity between cohorts may be a major challenge when attempting to develop fall risk assessment algorithms which generalize well. Independent validation of the sensor-based fall risk assessment algorithm on an independent cohort of 22 community dwelling older adults yielded a classification accuracy of 72.7%. Results suggest that the present method compares well to previously reported sensor-based fall risk assessment methods in assessing falls risk. Implementation of objective fall risk assessment methods on a large scale has the potential to improve quality of care and lead to a reduction in associated hospital costs, due to fewer admissions and reduced injuries due to falling.