Investment Objective & Risk Profile Questionnaire Cadaret, Grant & Co., Inc. Registered Investment Advisor Member, Financial Industry Regulatory Authority Securities Investor Protection Corporation
Investor Profile Questionnaire Client Name: Date: This questionnaire is designed to assist in defining investment objectives for assets placed in The Investment Management System. Through this fact-finding process, your answers will help determine the asset allocation and investment strategy that will be implemented in the account. Circle the answer that is most appropriate for the assets being invested. 1. How long is your investment outlook? Logic: What is an appropriate time horizon for these investments? When will you need access to the money? A longer time horizon implies a greater ability to take short- term risk. A. Under 3 years B. 3 to 5 years C. 5 to 7 years D. 7 to 10 years E. More than 10 years 2. What is your attitude toward taking risk to increase future buying power? Logic: Generally, the higher after-inflation returns that are desired, the greater the amount of risk, or short-term volatility that is incurred. Historically, to achieve higher rates of return, investors have had to accept greater fluctuations in portfolio value. A. Take highest expected returns possible B. Take risk to increase returns C. Take moderate risk to increase returns D. Take little risk to beat inflation E. Take no extra risk, just keep up with inflation 3. Comparatively, how much income do you expect to have available for discretionary purchases, savings, and investments over the next 3 years? Logic: A decrease in future discretionary income suggests a more conservative portfolio. A. Substantially less B. Somewhat less C. About the same D. Somewhat more E. Substantially more than I have now
4. How much do you expect your annual income to vary over the next 3 years? Logic: An increase in annual income suggests the ability to absorb greater portfolio fluctuation. A. I expect my annual income to increase substantially. B. I expect my annual income to increase somewhat. C. I expect my annual income to just keep up with inflation. D. I expect my annual income to decrease. E. I expect my annual income to decrease substantially. 5. What are your cash withdrawal requirements from this portfolio? Logic: A greater need for current income implies a need for less volatility over short periods of time. A. Highest level of current income possible B. 4% to 6% per year C. 2% to 4% per year D. 1% to 2% per year E. No foreseeable withdrawals 6. Overall, how would you categorize your investment objectives for this portfolio? Logic: Give your primary purpose for the assets being invested in this program. A. Emphasis on maximum growth of capital B. Emphasis on growth of capital C. Emphasis is split between capital growth and stability of account value D. Emphasis on stability of account value with some focus on moderate capital growth E. Emphasis on safety and preventing capital losses 7. How consistent must your investment returns be? Logic: To maintain consistent returns it is necessary to decrease volatility and expected returns. A. I want a consistent return. B. I want very little variation. C. I am willing to have moderate variation. D. I am willing to have some variation. E. I want the highest long-term returns and will accept short-term variations.
8. What level of risk, or volatility (up and down movement in value over time), will you accept to get return? Logic: While return is important, how it is achieved is also important. The level of acceptable risk will usually determine long-term results. A. As much or greater volatility than the stock market. B. About the same volatility as the stock market. C. Slightly less volatility than the stock market. D. Less volatility than the stock market and about the same as the bond market. E. Less volatility than the stock and bond market. 9. Hypothetically, you are a contestant on a game show, where you've just won $50,000. The game show host offers you a chance at the grand prize which could either triple your money or lose it. How much of your $50,000 do you risk? Logic: What one does with marginal dollars often gives insight to underlying risk tolerance. A. None B. $12,500 C. $25,000 D. $37,500 E. All 10. Over the next 2 to 3 years, what is the possibility that unexpected withdrawals could occur in this account? Logic: A greater likelihood of unexpected withdrawals suggests the need for less volatility and lower expected returns. A. Very unlikely B. Somewhat unlikely C. Unsure D. Somewhat likely E. Very likely Client Signature Date Client Signature (if joint) Date
TIMS Confidential Client Score Sheet Step one score the Risk Profile Questionnaire: Even Numbered Questions A = 5 B = 4 C = 3 D = 2 E = 1 Odd Numbered Questions A = 1 B = 2 C = 3 D = 4 E = 5 + = Step two select asset allocation model based on above score: Income Model Balanced Model Growth and Income Model Growth Model Aggressive Growth Model 11 14 points 15 23 points 24 32 points 33 41 points 42 50 points Step three note any required adjustments or portfolio constraints: Client name: Date: THIS PAGE IS FOR INTERNAL USE ONLY