CLIENT RISK PROFILE QUESTIONNAIRE
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In order for us to provide financial planning advice to you, we need to have a reasonable basis for that advice. The information requested in this Client Risk Profile Questionnaire is one of the tools we use to establish a basis for the advice we will provide. It is therefore important for you to complete this document as accurately and fully as possible. Failure to do so could result in advice being provided that is not appropriate to your individual needs, circumstances and objectives.
Please complete the below questionnaire in full.
It is important that you answer each question accurately and honestly, otherwise it may result in an investment risk profile that is not suitable for your investment portfolio or that does not adequately reflect your current attitude towards investing.
YOUR Investment Risk Profile Levels
Investment risk refers to the level of volatility or fluctuation that a person is prepared to accept in investment returns – including the potential risk of loss of some capital in the short‐ term, and the potential risk that retirement goals may not be met in the longer term. Volatility refers to the unpredictable upward and downward movements in investment values over a period of time.
Please answer all the questions below by ticking (√) only ONE of the options for each question. Choose the option that BEST indicates how you feel about each question.
1. What is your Investment horizon? How long can you keep your money invested in the market before needing access to it?
Up to two years
Two and three years
Three and five years
Five years and Ten years
Ten years and more
2. The age group you belong to:
51 years & above
36 - 50 years
25 - 35 years
Less than 25 years
3. How well do you understand investing in the markets?
I am a novice. I don’t understand the markets at all.
I have basic understanding of investing. I understand the risks and basic investment concepts like diversification.
I have an amateur interest in investing. I have invested earlier on my own. I understand how markets fluctuate and the pros and cons of different investment classes.
I am an experienced investor. I have invested in different markets and understand different investment strategies. I have my own investment philosophy.
4. My current and future income sources (example: salary, business income, investment income etc) are:
5. From the following 5 possible investment scenario, please select the option which defines your investment objective?
I cannot consider any Loss
I can consider Loss of 4% if the possible Gains are of 10%
I can consider Loss of 8% if the possible Gains are of 22%
I can consider Loss of 14% if the possible Gains are of 30%
I can consider Loss of 25% if the possible Gains are of 50%
6. If your investment outlook is long‐term (more than five years), how long will you hold on to a poorly performing portfolio before cashing in?
Not hold & cash in immediately if there is an erosion of my capital
I’d hold for 3 months
I’d hold for 6 months
I’d hold for one year
I’d hold for up to two years
I’d hold for more than two years.
7. Volatile investments usually provide higher returns and tax efficiency. What is your desired balance?
Preferably guaranteed returns, before tax efficiency
Stable, reliable returns, minimal tax efficiency
Some variability in returns, some tax efficiency
Moderate variability in returns, reasonable tax efficiency.
Unstable, but potentially higher returns, maximising tax efficiency.
8. If a few months after investing, the value of your investments declines by 20%, what would you do?
Cut losses immediately and liquidate all investments. Capital preservation is paramount.
Cut your losses and transfer investments to safer asset classes.
You would be worried, but would give your investments a little more time.
You are ok with volatility and accept decline in portfolio value as a part of investing. You would keep your investments as they are.
You would add to your investments to bring the average buying price lower. You are confident about your investments and are not perturbed by notional losses.
9. Which of these scenarios best describes your “Risk Range”? What level of losses and profits would be comfortable with?
Investment A - Worst Year (1%) - Best Year (15%)
Investment B - Worst Year (-5%) - Best Year (20%)
Investment C - Worst Year (-10%) - Best Year (25%)
Investment D - Worst Year (-14%) - Best Year (30%)
Investment E - Worst Year (-18%) - Best Year (35%)
Investment F - Worst Year (-21%) - Best Year (40%)
Below is the score‐card that we will use to determine your risk profile, which in turn shall determine your asset allocation mix.
Conservative - Score 8-19
You are an investor who is prepared to accept lower returns with lower levels of risk in order to preserve your capital. The negative effects of taxation and inflation will not be concern to you, provided your initial investment is protected. As a conservative investor, you might expect your portfolio to be allocated up to 15% in growth assets, with the remainder in defensive assets.
Moderate - Score 20-29
You are an investor who would like to invest in both income and growth assets. You will be comfortable with calculated risks to achieve good returns; however, you require an investment strategy that adequately deals with the effects of inflation and tax. As a moderate investor, you might expect your portfolio to be allocated up to 35% in growth assets, with the remainder in defensive assets.
Aggressive - Score >40
You are an investor who is comfortable with a higher level of risk in order to achieve potentially higher returns. Capital security is secondary to potential wealth accumulation. As a high growth investor, you might expect your portfolio to be allocated < 65% in growth assets over long term.
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