Risk profile

Investing in financial markets carries risks. This means there is a chance the value of your
investments will rise or fall in value. Do you prefer slow but steady investment growth, or are you
willing to experience ups and downs for the potential of greater returns over the long run?

Everyone has a different attitude to money. Some people want or need certainty that the value of their
investment will not fluctuate by much. In exchange for this assurance they are prepared to accept the
prospect of lower returns in the long run. Others are willing to accept that the value of their investment
could go down in the short term in anticipation of achieving higher returns in the long run.

Understanding your attitude to money is vital in determining how to invest your money. We call this
‘knowing your risk profile’.

Please complete the questionnaire below to determine your risk profile. Tick one box for each
question. People who hold assets jointly often have differing views regarding the level of risk they are
prepared to accept. If you have different views to your partner, please complete a separate
questionnaire. You may also have a different attitude to risk for each of your goals. You may like to
complete a separate questionnaire for each goal.

1) IF MY INVESTMENT VALUE FLUCTUATED MORE THAN 20% OVER ANY TIME FRAME, I
WOULD FIND IT HARD TO SLEEP AT NIGHT.

 1. Strongly agree
 2. Agree
 3. Neutral
 4. Disagree
 5. Strongly disagree

2) I AM WILLING TO ACCEPT MORE RISK TO POSSIBLY ACHIEVE HIGHER RETURNS.

 1. Strongly disagree
 2. Disagree
 3. Neutral
 4. Agree
 5. Strongly agree

3) IF YOU HAD AN INVESTMENT PORTFOLIO, HOW OFTEN WOULD YOU REARRANGE IT?

 1. Whenever there is a fall in value

 2. At least every 3 years
 3. Every 3 to 5 years
 4. Whenever my investments go up significantly
 5. Every 5 years or more

4) I AM WILLING TO EXPERIENCE THE UPS AND DOWNS OF THE MARKET FOR THE
POTENTIAL OF GREATER RETURNS OVER THE LONG TERM.
  1. Strongly disagree
 2. Disagree
 3. Neutral
 4. Agree
 5. Strongly agree

5) WHICH OF THE FOLLOWING BEST DESCRIBES YOUR ATTITUDE TO FINANCIAL RISK?

 1. A very low risk taker

 2. A low risk taker
 3. An average risk taker
 4. A high risk taker
 5. A very high risk taker

6) WHICH STATEMENT BEST DESCRIBES YOUR UNDERSTANDING OF FINANCIAL MARKETS

AND INVESTMENTS?

 1. I am not familiar with financial markets and I have little interest in them
 2. Not very familiar
 3. Have had enough experience to understand the importance of diversification
 4. I understand markets fluctuate and different market sectors have different income and
growth characteristics
 5. I am experienced with all investment sectors and understand the various factors that may
influence performance

7) MY MAIN CONCERN IS SECURITY. KEEPING MY MONEY SAFE IS MORE IMPORTANT THAN

EARNING HIGHER RETURNS.

 1. Strongly agree
 2. Agree
 3. Neutral
 4. Disagree
 5. Strongly disagree

8) HOW DO YOU NORMALLY FEEL AFTER YOU HAVE MADE A SIGNIFICANT FINANCIAL
DECISION?

 1. Very concerned
 2. Concerned
 3. A little uneasy
 4. Content I have made the right decision
 5. Optimistic that the decision I have made will provide substantial benefits
9) INVESTMENTS THAT HAVE EXPERIENCED HIGH VOLATILITY HAVE GENERALLY
COMPENSATED INVESTORS WITH HIGHER RETURNS OVER THE LONG TERM. IF YOU
COULD INVEST IN AN INVESTMENT FOR BETWEEN 10 AND 20 YEARS, WHICH OF THE
FOLLOWING WOULD MOST SUIT YOU?

 1. An investment that may have a negative return every 10 years but will usually have an
annual return between -2% and 11% pa with an average return of 4.1% pa.

 2. An investment that may have a negative return every 8 years but will usually have an
annual return between -5% and 14% pa with an average return of 4.7% pa.

 3. An investment that may have a negative return every 5 years but will usually have an
annual return between -7% and 17% pa with an average return of 5.0% pa.

 4. An investment that may have a negative return every 4 years but will usually have an
annual return between -9% and 20% pa with an average return of 5.5% pa

.
 5. An investment that may have a negative return every 4 years but will usually have an
annual return between -11% and 23% pa with an average return of 5.9% pa.

Note: illustrated returns are after tax.

Calculate your tolerance to risk by adding the numbers for each box you have ticked in questions 1 to
9.

MY RISK SCORE IS _________

Now match your risk score to the risk profile in the table below.isk profile

9 – 16 CONSERVATIVE: A VERY LOW RISK TAKER

You are a conservative investor. Risk must be very low and you are prepared to accept

lower returns to protect capital. The negative effects of inflation will not concern you, provided your
initial investment is protected.

17 – 23 MODERATELY CONSERVATIVE: A LOW RISK TAKER

You are a moderately conservative investor seeking better than basic returns, but risk must be low.
Typically an investor seeking to protect the wealth that you have accumulated, you may be prepared
to consider less aggressive growth investments.
24 – 30 BALANCED:AN AVERAGE RISK TAKER

You are a balanced investor who wants a diversified investment to work towards medium to long-term
financial goals. You require an investment strategy that will cope with the effects of inflation.
Calculated risks will be acceptable to you to achieve good returns.

31 – 37 MODERATELY AGGRESSIVE : A HIGH RISK TAKER

You are a moderately aggressive investor, probably earning sufficient income to invest most funds for
capital growth. Prepared to accept higher volatility and moderate risks, your primary concern is to
accumulate assets over the medium to long term. The assets you hold will be similar to a balanced
investment but more aggressive investments will be included.

38 – 45 AGGRESSIVE : A VERY HIGH RISK TAKER

You are an aggressive investor prepared to compromise investment balance to pursue potentially
greater long-term returns. Your investment choices are diverse, but carry with them a higher level of
risk. Security of capital is secondary to the potential for wealth accumulation.

Additional comments not covered by the above questions e.g. any ethical
investment requirements, expectations on investment returns such as maximum
downside risk, your opinion on whether return of capital is an over-riding factor
compared with return on capital or any other matters you want your financial
advisor to take into account.

Signed:

Date: