These questions help us to gauge how much risk the trustees are willing to take on, bearing in mind that greater risk is needed in order to have the potential to achieve higher returns.
Please answer all the questions by selecting one of the options. Choose the option that best indicates how you feel about each question. If none of the options is exactly right for you, choose the option that is closest.
1. Compared to others, how do you rate your willingness to take financial risks?
2. When faced with a major financial decision, are you more concerned about the possible losses or the possible gains?
3. What degree of risk have you taken with your financial decisions in the past?
4. What degree of risk are you currently prepared to take with your financial decisions?
5. Most investment portfolios have a mix of investments - some of the investments may have high expected returns but with high risk, some may have medium expected returns and medium risk, and some may be low-risk/low-return. (For example, shares and property would be high-risk/high-return whereas cash and bank deposits would be low-risk/low-return.)
Which mix of investments do you find most appealing? Would you prefer all low-risk/low-return, all high-risk/high-return, or somewhere in between?
Please select one of the seven portfolios listed below.
6. Although equity based investment is more volatile it can produce higher returns and over the longer term produce returns in excess of inflation.
Which statement most accurately reflects the trustees' views about the level of return the Trust is seeking in relation to the level of inflation?
7. Although equities have historically produced superior returns over the longer term they also fluctuate more and can fall in value.
When trying to achieve this return for the portfolio and in normal circumstances, what is the maximum loss the trustees would be willing to accept in any one year?
8. When making an investment, return and risk usually go hand-in-hand. Investments which
produce above-average returns are usually of above-average risk.
With this in mind, how much of the funds you have available to invest would you be willing to place in investments where both returns and risks are expected to be above average?
9. Think of the average rate of return you would expect to earn on an investment portfolio over the next ten years. How does this compare with what you think you would earn if you invested the money in bank deposits?
10. You are considering placing one-quarter of your investment funds into a single investment. This investment is expected to earn about twice the bank deposit rate. However, unlike a bank deposit, this investment is not protected against loss of the money invested.
How low would the chance of a loss have to be for you to make the investment?
11. With some types of investment, such as cash and bank deposits, the value of the investment is fixed. However inflation will cause the purchasing power of this value to decrease.
With other types of investment, such as shares and property, the value is not fixed. It will vary. In the short term it may even fall below the purchase price. However, over the long term, the value of shares and property should certainly increase by more than the rate of inflation.
With this in mind, which is more important to you - that the value of your investments does not fall or that it retains its purchasing power?
12. This questionnaire is scored on a scale of 0 to 100. When the scores are graphed they follow the familiar bell-curve of the Normal distribution shown below. The average score is 50. Two-thirds of all scores are within 10 points of the average. Only 1 in 1000 is less than 20 or more than 80.
The following questions will help us to build up a picture of the relative importance the investment funds the trustees have put in our care in relation to the overall wealth and income requirements.
13. How important is the income generated by this portfolio in terms of funding your on-going spending requirements?
Thinking about all of the Trust's sources of income what proportion will be generated by this portfolio?
14. The capital value of your portfolio may fluctuate up and down but the income produced may behave differently. Fixed income investments by their nature produce a fixed and regular flow of income but this does not usually increase with inflation. In order to produce a growing income over the longer term it will be necessary to include an element of equity investment with commensurate levels of risk.
How important is stability of income from the portfolio?
15. In order for us to recommend a suitable investment strategy, we need to understand how significant the portfolio is in terms of the Trust’s overall wealth.
This portfolio represents the following proportion of the investable assets.
16. Sometimes circumstances change quickly and money may be required at short notice.
Does the Trust have a "cash buffer" (a proportion of assets which is in cash and which is readily accessible at short notice for unforeseen circumstances)?
17. Please tell us if the Trust has any outstanding liabilities or significant future financial commitments e.g. loans, mortgages, tax liabilities, capital expenditure
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Authorised and Regulated by the Financial Conduct Authority. Chartered Financial Planners.