INVESTOR PROFILE QUESTIONNAIRE

Transcription

1 INVESTOR PROFILE QUESTIONNAIRE PRIVATE CLIENT MANAGED PORTFOLIOS

2 PRIVATE CLIENT MANAGED PORTFOLIOS INTRODUCTION 1 PRIVATE CLIENT INVESTOR PROFILE QUESTIONNAIRE Determining the right investment strategy is essential to each investor s future success. The right strategy will help you endure market fluctuations and stay focused on your long-term goals. United Financial Private Client understands this and the complexities of today s capital markets. Dedicated, seasoned and committed, our goal is to relieve you of the burden of managing your investment portfolio alone, so that you may enjoy the rewards of your career and your family. The first step in the process is the completion of this Investor Profile Questionnaire (IPQ) which has been carefully designed to take you through an important information gathering process. We use the IPQ to provide us with a clear understanding of your overall financial well-being. The information provided through this exercise will be used by our analysts in preparing your Investment Policy Statement (IPS) a personally tailored document outlining our investment strategy for your portfolio. Your IPS will detail our asset allocation decision, which is the single most important step in structuring your portfolio. Studies have shown that over 90% of the variability of a portfolio s return is associated with the asset mix decision (Source: Brinson, Hood and Beebower). Your IPS is the baseline against which you will be able to measure the ongoing performance of your investments. The effectiveness and precision of the IPS are largely based upon the quality of the information that goes into its preparation. That is why it is so essential for you to be thoughtful and thorough in answering all of the questions contained in the IPQ. While some questions may appear to be indirect or unrelated, they have all been designed to elicit useful and important responses. It is also important to note that the management of your portfolio is a dynamic process one that is constantly evolving. Therefore, it is essential that you continue to keep us informed of any major changes in your life that could impact on your portfolio. That way, we will be able to make any necessary adjustments. We look forward to working together with you to develop a tailored investment strategy best suited to your personal situation and individual needs. Please be assured that the information you provide will be maintained in the strictest of confidence.

3 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION ONE 2 BACKGROUND INFORMATION OF INVESTOR(S) IN THE INVESTMENT POLICY GROUP Our approach to portfolio management, emphasizes long term wealth creation and preservation. Consistent with this approach, a portfolio will often include accounts belonging to a number of individual taxpayers managed under the same investment policy (referred to as an IP Group). This, in turn, allows the opportunity to manage, to the degree possible, the impact of income taxes on a family group s portfolio. When examining whether a particular account should be included in the IP Group we consider all the following criteria: Related by marriage or blood Connected under the Income Tax Act Residing in the same household Common financial goals and investment objectives for each account Beneficial ownership and control of corporations or trusts In addition to the foregoing, there are additional considerations in order to assess if a corporation or a trust should be managed within a particular IP Group. All of the information gathered will be used to manage your accounts, as part of a single portfolio, unless we determine that to do so would be inappropriate. If there are additional investors to be included in this IP Group beyond what we have provided space for, please attach a supplemental page and ensure that the appropriate signatures are obtained in this IPQ. If any person or entity is to be managed separately from this IP Group, a separate IPQ must be completed.

4 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION ONE 3 A. Is this a new IP Group, or an update to an existing IP Group? m New m Update-IP Group # Note: A New Account Application and Advisory Agreement Form must be completed for each individual and/or entity that is part of this IP Group. B. List the name(s) of the individuals and/or entities that are part of this IP Group 1. Name/Trust/Legal Entity Account Type (Individual, RRSP, Corporate, etc.) Amount of Initial Deposit (Approximate $) 2. Name/Trust/Legal Entity Account Type (Individual, RRSP, Corporate, etc.) Amount of Initial Deposit (Approximate $) 3. Name/Trust/Legal Entity Account Type (Individual, RRSP, Corporate, etc.) Amount of Initial Deposit (Approximate $) 4. Name/Trust/Legal Entity Account Type (Individual, RRSP, Corporate, etc.) Amount of Initial Deposit (Approximate $)

5 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION TWO 4 The first step in determining your investment strategy is finding out who you are as an investor. This questionnaire is designed to help us understand your financial situation, your investment goals, how long you plan to invest and in particular, how much market volatility you are willing to accept. Based on the information you provide, we will recommend an asset mix that will best help you preserve and grow your wealth. We ask that you complete all questions so that we can tailor your portfolio to your specific goals and needs. Tell us about yourself These questions help us determine which investments are suitable for your stage in life and financial situation 1. What is your age? Please also include the age of your spouse if this is a joint investment or of the person who will ultimately use these funds, if applicable. a) AGE CLIENT 1 b) AGE CLIENT 2 i) Under 30 i) Under 30 ii) 30 to 45 iii) 46 to 55 iv) 56 to 65 v) Over 65 N/A other, such as a corporation ii) 30 to 45 iii) 46 to 55 iv) 56 to 65 v) Over 65 N/A other, such as a corporation 2. How long are you planning to let the majority of your savings grow? If you intend to remain invested for a long period, your portfolio may be able to withstand a greater allocation to equities because it may have time to recover from cyclical lows. If you need your money sooner, you might want to consider investments that fluctuate less in value. If you have important financial goals with different timeframes, you may need more than one Investment Policy Statement (IPS). m a) Less than three years m b) Three to five years m c) Six to 10 years m d) 11 to 15 years m e) Over 15 years

6 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION TWO 5 3. How would you describe your investment knowledge? m a) Novice I m new to investing. m b) Fair I have invested in GICs and similar investments, but my understanding of other types of investments is limited. m c) Good I have invested in basic types of investments, such as mutual funds, stocks and bonds, and understand how they work. m d) Sophisticated I am very knowledgeable about the markets and different kinds of investments. 4. How stable is your financial situation? Financial stability is generally determined by how stable your non-investment income is, how predictable your expenses are and by how much your assets outweigh your debts. The more stable your financial situation is (e.g. secure job, good health, regular pension entitlement, etc.), the less likely you ll need to withdraw funds from your portfolio unexpectedly or earlier than planned. m a) Very unstable m b) Somewhat unstable m c) Stable m d) Very stable 5. What is your marginal tax rate? Taxes can be a significant drain on investment returns over time. United Financial can structure your family s accounts on a tax-effective basis and recommend a strategy to help minimize taxes. This might include consolidating all family accounts under one IPS while treating each account separately from a tax point of view. MARGINAL TAX RATE % Client 1 % Client 2

7 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION TWO 6 Your investment requirements Having a clear idea of what you need from your investments is an important step in building your portfolio because some investments may be better suited than others for meeting specific goals. 6. How much do you plan to invest in this portfolio a) Amount of your investment $ b) Percentage of your total investment assets this investment represents % c) Percentage of this investment funded with borrowed money % Using borrowed money to finance the purchase of securities involves greater risk than a purchase using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines. Client 1 Initials Client 2 Initials 7. Please describe your ability to save. Your ability to save factors into your ability to tolerate changes in the value of your portfolio. a) What percentage of your pre-tax income do you currently save and invest in your portfolio each year? m i) Not applicable currently earning no employment or business income, or expect to retire within next three years. m ii) 0 to 3% m iii) 4 to 9% m iv) 10 to 15% m v) Over 15% b) Please provide details of any future investments you plan to make to this portfolio. $ Frequency: Start date: $ Frequency: Start date: $ Frequency: Start date:

8 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION TWO 7 8. How will you be using the majority of this portfolio? (Please check one) m a) To fund your lifestyle currently, or within the next three years m b) To fund your future retirement (more than three years away) m c) To fund core expenditures, such as a house, education or business m d) To fund discretionary expenditures, such as a vacation property or boat m e) For charitable giving m f) To leave for your estate or the next generation m g) Other 9. It is important to know if you are currently using your investments to fund your lifestyle, or will be within the next three years. a) What other sources of income do you have to supplement your required investment income? m i) Not applicable not living off my savings currently or within next three years. Or, please check one or more of the following if applicable: m ii) Canadian Pension Plan and/or Old Age Security m iii) Company or other pension plan payments m iv) Part-time employment, consulting or other sources m v) Family member s income m vi) Other savings m vii) None relying completely on my portfolio to fund lifestyle b) If yes, how much pre-tax income do you expect you will need to withdraw each year? $ (pre tax) m per month m per quarter m per year Or, % of your investment in this portfolio per year.

9 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION TWO Do you expect to withdraw a sizable lump sum from your portfolio in the next five years to fund a major expenditure, such as starting a business or financing a child s education? a) m Yes m No b) If yes, please provide details of your expected expenditures so we can take them into account when recommending your asset mix. $ Date: For: $ Date: For: $ Date: For: c) Since withdrawing funds at market lows can significantly impair your wealth, do you have other means to fund any unexpected cash needs that may arise at inopportune times? m Yes m No 11. What percentage of your initial investment in this portfolio do you expect to withdraw over the next five years to fund regular income requirements and/or lump-sum expenditures? m a) 0% m b) 1 to 10% m c) 11 to 33% m d) 34 to 66% m e) 67 to 100% Your investing personality Your peace of mind is one of the most important considerations when building your portfolio. These questions help us understand how much market volatility you are comfortable taking in exchange for potentially higher returns. This is called the risk-return trade-off. 12. Which statement best describes your objectives for your portfolio? m a) Preservation of capital. I am willing to accept lower returns over the long term if it means minimizing the chance of a loss. m b) Modest growth. I am willing to take on a small amount of risk if it means achieving some growth. m c) Balanced growth. I am willing to invest in a portfolio with medium risk if it means achieving moderate returns. m d) High growth over the long term. I am willing to invest in a portfolio whose value may fluctuate dramatically in the short term, if it means achieving higher returns over the long term.

10 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION TWO Please help us further understand the relative importance to you of capital preservation and growth of principal by allocating a total of 10 points to the following. (The more you allocate to one of the two choices, the more important it is to you.) Preservation of capital Growth of principal + = The chart below shows the relationship between a portfolio s average return over the long term and the minimum loss that could be expected once in about every six years. As the chart shows, the higher the average rate of return, the greater the probable loss in a down market. 10% Average Annual Return 5% 0% -5% -10% -15% Every six years, a loss of at least this magnitude would be expected A B C D E Which portfolio most closely reflects your willingness to accept greater market volatility to achieve greater potential returns? m a) Portfolio A m b) Portfolio B m c) Portfolio C m d) Portfolio D m e) Portfolio E m f) None I want a portfolio that minimizes the risk of loss even further

11 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION TWO How would you react if your portfolio was underperforming? In general, the portfolio with the lowest volatility available to investors consists entirely of government-issued treasury bills (T-bills). The return on this portfolio is known as the risk-free rate. As investors add volatility to their portfolio by including other investments, such as stocks and bonds, they can expect to be rewarded with higher long-term rates of return. The return above the risk-free rate is known as the managed account premium ( MAP ). However, in a market downturn, such a portfolio could experience lower returns than the risk free rate, possibly for an extended period. The graph below shows the hypothetical returns of a portfolio over six years, compared to an investment in T-bills with an annual rate of return of 3%. 12% Annual Portfolio Return 8% 4% Risk-Free Rate 0% -4% -8% Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Assuming the portfolio s recent performance has been comparable to the market s performance, but is lower than the risk-free return, how would you react at the six-year mark if you still had a reasonable investment timeframe and didn t need to withdraw your investment to fund a cash need? m a) Sell the entire portfolio immediately and reinvest the proceeds in a GIC or money market fund. m b) Sell some of the portfolio, invest the proceeds in a GIC or money market fund and keep the rest invested in the existing portfolio. m c) Ask your advisor to recommend a more conservative portfolio. m d) Continue to hold with the expectation that the portfolio s value will recover. m e) Make an additional investment to take advantage of lower prices. 16. Which of the following statements best describes your willingness to tolerate decreases in the value of your portfolio from one quarter to the next? m a) Not at all. m b) I can tolerate small decreases (-1% to -5% in a quarter). m c) I can tolerate medium-sized decreases (-6% to -12% in a quarter). m d) I am not worried about the size of any quarterly loss.

12 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION TWO What is the largest cumulative decline in the value of your portfolio that you could tolerate before re-evaluating your risk tolerance? Markets can suffer large losses over varying lengths of time, but historically, portfolios with greater volatility have tended to generate higher long-term returns. m a) 0% 5% m b) 5% 10% m c) 10% 15% m d) 15% 20% m e) Market declines do not concern me. I am committed to maximizing my long-term return. 18. Over the course of a bear market, assume the value of your portfolio has declined by more than 25%. How would this affect your lifestyle and financial goals? m a) My lifestyle would not be compromised and my main financial goals (e.g., retirement or leaving a sizable estate) would remain comfortably achievable. m b) I would be able to maintain my lifestyle but would have to alter my main financial goal(s) by extending the date or scaling them back. m c) I would have to change my current lifestyle by saving more or spending less to maintain a high probability of achieving my main financial goal(s). m d) I would be forced to scale back my lifestyle and re-evaluate my financial goals. m e) My lifestyle and/or financial goals would be seriously compromised. 19. How many years will you give your portfolio before deciding if it is meeting your performance expectations? m a) Less than one year m b) One to two years m c) Three to five years m d) Six to nine years m e) More than 10 years 20. You unexpectedly come into a sizeable sum of money. What would you do with the money? m a) Spend the majority of it or give it away. m b) Invest all of it in my portfolio to help me reach my long-term financial goals. m c) Put some of it toward debt and invest the rest in my portfolio. m d) Pay off or reduce my debt.

13 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION TWO 12 Your investment preferences These questions provide us with additional information so that we can further customize your portfolio to reflect your preferences. If you decide not to answer them, your recommended portfolio will be based only on the first 20 questions. 21. What is your preference for investment style? We offer you three investment-management styles for the large-cap equity portion of your portfolio: Value, Alpha and Growth. Value managers seek companies that are currently out of favour and/or have lower valuation measures (e.g., low price-to-earnings and price-to-book ratios). The expectation is that share prices will rise toward their true value. Growth managers seek companies with accelerating earnings growth and/or increasing market share. Although these companies often trade at higher valuations than the broader market, the expectation is that share prices will increase accordingly. Our Alpha managers create a concentrated portfolio of their best ideas consisting of approximately 20 to 60 stocks, selected for their attractive valuation and/or growth prospects. Our Alpha managers ignore the index when constructing the portfolios, taking on different risk than the index. Although each investment style is diversified across a number of holdings, investors may want to further diversify their portfolio by investment manager. Accordingly, United Financial s current default style allocation is 60% value and 40% growth. If you prefer to have a style mix other than our default allocation, please indicate your preference by allocating a total of 10 points in the table below. (The more you allocate to one of the three choices, the greater the presence it will have in your portfolio.) CANADIAN LARGE CAP US LARGE CAP INTERNATIONAL DEVELOPED MARKETS VALUE + GROWTH + ALPHA + TOTAL =

14 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION TWO Which of the following best describes your preference for investing outside Canada? Canada represents less than 3% of the world s available investment options. United Financial portfolios are structured to allow you to participate in opportunities from around the world. While increasing portfolio diversification through carefully selected foreign securities has been found to increase long-term returns and reduce portfolio volatility, it can also present currency and other risks to Canadian investors. m a) Standard allocation I have no particular preference and will invest in the standard foreign allocations determined by United Financial. m b) Reduced allocation While I recognize that I need to diversify with foreign securities, I would like to invest a smaller percentage than the standard foreign allocation. My portfolio will include the appropriate allocation to small cap, emerging markets and real estate securities. m c) Increased allocation I recognize that I need to diversify with foreign securities and I would like to invest a larger percentage than the standard foreign allocation. My portfolio will include the appropriate allocation to small cap, emerging markets and real estate securities. 23. Do you have any portfolio constraints? Describe any specific preferences or investment restrictions you would like us to consider in creating your portfolio? An example of a specific preference might be to overweight or underweight a specific asset class or to incorporate certain securities that you already own into your portfolio. An example of an investment restriction would be to avoid investing in certain pools or segregated securities. I N T E R N A L U S E O N L Y 24. Special instructions to IP Group: 25. Investment Counsellor comments and additional information to be reflected in the Investment Policy Statement:

15 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION TWO 14 OPTIONAL APPENDICES FOR INVESTMENT COUNSELLOR USE ONLY If you would like additional appendices included in the final IPS sent to the client, please indicate below: Available Appendices: m Range of Returns Over Time m Style Selection m The Value of Third-Party Professionals m United Pool Managers

16 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION THREE 15 INCOME TAX PROFILE If your Family Group has already provided the information requested in Section Three in a previous Investor Profile, and there have been no significant changes, please proceed to Section Four. The following chart has been designed to develop an Income Tax Profile, which will be utilized to allocate the assets within your portfolio so as to maximize your after-tax return. Some of the information requested is highly technical. Accordingly, you may wish to consult your accountant for assistance in completing this section. Alternatively, you could provide copies of income tax returns for all related individuals, companies, and trusts, which we will analyze on your behalf. MARGINAL CAPITAL LOSSES OPERATING LOSSES NAME TAX RATE CARRY FORWARD OR ABILS * First Investor: Second Investor: RELATED ACCOUTS (i.e. corporations or trusts) * Allowable Business Investment Losses.

17 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION FOUR 16 NET WORTH (Optional Worksheet) Please list the current values of your assets and liabilities; then calculate your Estimated Total Net Worth using the following worksheet: ASSETS FIRST INVESTOR SECOND INVESTOR JOINT RELATED ACCOUNTS (Trust, Corps, etc.) Investment Assets Liquid Assets Cash & Chequing Savings Account Short-Term Deposit Non-Registered Investment Assets Managed by United Financial Not Managed by United Financial Registered Retirement Assets (RRSP/RRIF) Managed by United Financial Not Managed by United Financial A) Total Investment Assets Personal Assets Residence/Cottage Furnishings Vehicles Other (describe): B) Total Personal Assets LIABILITIES FIRST INVESTOR SECOND INVESTOR JOINT RELATED ACCOUNTS (Trust, Corps, etc.) C) Loans for investment purposes D) Loans for personal purposes ESTIMATED TOTAL FIRST INVESTOR SECOND INVESTOR JOINT RELATED ACCOUNTS NET WORTH (Trust, Corps, etc.) E) Estimated net liquid assets (equals A C) Cash and securities less loans outstanding against securities F) Estimated net Fixed assets (equals B D) Fixed Assets less liablities outstanding against Fixed assets Estimated total net assets (equals E + F)

18 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION FIVE 17 INCOME AND EXPENDITURES (Optional Worksheet) Please indicate your annual level of income and expenditures for the current year: INCOME FIRST INVESTOR SECOND INVESTOR Gross Salary Bonuses/Commissions Self-Employment Pensions, CPP, and OAS Benefits Other Earnings Interest Dividends Rental Income Partnerships Other Investment Income Capital Gains Annuities A) Total Income EXPENDITURES FIRST INVESTOR SECOND INVESTOR Shelter Transportation Food Clothing Insurance Premiums Alimony/Maintenance Vacations Debt Reduction Income Taxes Other Expenses B) Total Income Net Income (equals A B)

19 PRIVATE CLIENT MANAGED PORTFOLIOS SECTION SIX 18 To the Investor: You have now completed the Investor Profile Questionnaire and have provided our analysts with the information they require in order to prepare your Investment Policy Statement. The Investment Policy Statement and the investment management services we will provide to you will be based solely on the information gathered in this Investor Profile Questionnaire. To the extent that the information is inaccurate or incomplete, we cannot be confident that the asset mix will be appropriate to your circumstances. Please sign below and record the date, confirming that you have answered the questions accurately and completely, and are satisfied to the best of your knowledge with the answers you have given. By signing below you agree that all of the accounts in your IP Group should be managed as a group, unless we determine that it would be inappropriate to do so. This Investor Profile Questionnaire, together with the New Account Application and Account Agreement forms the contract between you and United Financial, a division of CI Private Counsel LP. Privacy Consent: I/We agree to the collection and use of my/our personal information contained in this Investor Profile Questionnaire solely for the purpose of carrying out United Financial s due diligence and in the preparation of an Investment Policy Statement for me/us. I/We understand that if I/we do not consent to use/share such information, United Financial will be unable to prepare an Investment Policy Statement and is therefore unable to open the account or provide the Private Client services. Investor/Authorized Signing Officer(s): X Name of Investor 1 Signature Date (MM/DD/YYYY) X Name of Investor 2 Signature Date (MM/DD/YYYY) X Name of Investor 3 Signature Date (MM/DD/YYYY) X Name of Investor 4 Signature Date (MM/DD/YYYY) To the Investment Counsellor: You have now reviewed the Investor Profile Questionnaire with your Client(s). Please sign below and record the date, confirming that you are satisfied the information provided is thorough and accurately reflects the financial situation, attitudes and investment objectives for this IP Group. X Investment Counsellor Name Investment Counsellor Signature Date (MM/DD/YYYY) Address Phone Number Fax Number

20 Please send the Investor Profile along with completed Account Application(s) to: United Financial Attn: Private Client Administration 15 York street, 7 th Floor Toronto, ON M5J 0A3 Private Client Managed Portfolios services are provided by United Financial, a division of CI Private Counsel LP ( United Financial ). United Financial and/or United Financial and design are trademarks of CI Investments Inc United Financial, a division of CI Private Counsel LP. All rights reserved _E (08/11)