Individual Investor Profile Questionnaire R02-AVPB-01/ Version 3
One of the first steps in developing an investment plan is to identify the investor s profile. This provides the opportunity to analyze logically the investor s needs, investment objectives and risk tolerance to define an investment strategy and build a portfolio that fully meets that profile. The investor s profile is based on the results obtained from the analysis of all of your answers, rather than just one of them Table of Contents 1. Investor Background Information... 3 2. Profile Self-Assessment... 3 3. Profile Description... 4 Investor Profile Questionnaire 2
Physical Investor Profile 1. Customer Information. Currency preference: a. Background. Full name: Age: Expected annual return (%): Number of dependents: $ 2. Investor Profile - Self-Assessment b. Financial information a. Choose the statement below that best fits your investment goals. Income: Investment amount: 1. ( ) I want 100% safe investment, even if returns are below the inflation rate level. Percentage of total liquid assets: 2. ( ) I am willing to accept occasional loss of value to achieve growth approaching at least the inflation rate level. Debt: 3. ( ) My investment must grow above the inflation rate level. I am willing to accept moderate risk to meet this goal. Properties owned: 4. ( ) My investment should grow far above the inflation rate. To achieve this, I am willing to accept significant risk. Market experience: International investments: Investor Profile Questionnaire 3
b. Consider two different investment scenarios. Scenario A provides a 5% average annual return with minimum risk of loss of value. Scenario B, on the other hand, provides a 10% average annual return with potential loss equal to 25% or more in any one year. How would you distribute your investment between these scenarios? 1. ( ) 100% on investment scenario A and 0% on investment scenario B. 2. ( ) 80% on investment scenario A and 20% on investment scenario B. 3. ( ) 50% on investment scenario A and 50% on investment scenario B. 4. ( ) 20% on investment scenario A and 80% on investment scenario B. 5. ( ) 0% on investment scenario A and 100% on investment scenario B. 4. ( ) Portfolio D: Average return, 10%; maximum return, 45%; minimum return, -36%. 5. ( ) Portfolio E: Average return, 12%; maximum return, 128%; minimum return, -54%. d. Indicate the shortest anticipated investment horizon when you will need a portion or your entire investment amount. 1. ( ) 0-1 year 2. ( ) 1-3 years 3. ( ) Over 3 years 3. Investor Profile Description a. Investment goal and risk tolerance. Risk is the name given to the degree of volatility in investment returns. Typically, more volatile (risky) investments offer greater potential for long-term growth than less volatile ones, but also they could lead to greater loss. Indicate your preference by checking (only) one option below. 1. ( ) Liquidity Invest in securities readily convertible into cash. 2. ( ) Capital preservation Preserve the face value of investments during the portfolio s investment horizon. Focus on the stability of investment value even if profits are low. 3. ( ) Conservative income. c. Which portfolio below would you select if given the choice? 1. ( ) Portfolio A: Average return, 4%; maximum return, 15%; minimum return, 0%. 2. ( ) Portfolio B: Average return, 6%; maximum return, 28%; minimum return, -7%. 3. ( ) Portfolio C: Average return, 8%; maximum return, 34%; minimum return, -21%. My main goal is to generate current income by investing in low-risk assets. I am willing to accept occasional loss of value as long as investments have some growth potential. 4. ( ) Moderate income My main goal is to generate current income. Willing to invest on assets with moderate risk level if that allows me to enhance income and achieve some growth potential for my investment. Investor Profile Questionnaire 4
5. ( ) Moderate growth My goal is to achieve long-term growth. Willing to invest on assets with moderate risk level if that gives me better chances for long-term growth. 6. ( ) Aggressive growth 3. ( ) 3 years and above. This horizon allows for long-term investment to enhance anticipated returns. However, it can restrict liquidity. My goal is to achieve long-term capital growth. Willing to invest on high-risk assets if that maximizes my chances for long-term growth. Notes and Comments: b. Investment horizon. The period of time when assets must be re-invested to meet customer goals. 1. ( ) Less than 1 year. This horizon restricts portfolio investments to typical money-market instruments, easily convertible into cash and exposed to return fluctuation due to short-term speculative swings. 2. ( ) 1-3 years. This horizon allows for reduced return volatility in the short term, an income-asset portfolio, and fewer chances to invest in longer-term assets allowing for increased returns. Investor Profile Questionnaire 5
Assessment Methodology Investor Profile Section 2 Question Answer Score 2 5 A 3 10 4 15 2 5 B 3 10 4 15 5 20 2 5 C 3 10 4 15 5 20 D 2 5 3 10 Subtotal Section 3 2 5 A 3 10 4 15 5 20 6 25 2 5 B 3 10 Subtotal Grand Total Investor Profile Questionnaire 6
ASSESSMENT Under 19 Capital preservation Conservative investors are willing to forego returns in order to preserve capital, even if that means yields lower than the inflation rate. They typically have minimum tolerance to capital loss, even if temporary. 19-30 Conservative income These investors aim at capital preservation as their main goal. Usually, however, they are willing to assume additional risk levels to maintain their investment s purchasing power. In view of that, they will usually aim at investment returns equal to the expected inflation levels or likely 1-2 percentage points above general price growth. In addition, conservative income investors will require regular income from their investments. 30-50 Moderate income Investors return goal indicates a lower need for growth. They are willing to accept some capital loss to achieve moderate investment growth in no less than 2 years. Their return goal will be always above expected inflation rates, in line with a need for regular income from investment. 50-70 Moderate growth Moderate growth investors aim mainly at investment growth over time. They have little or no need for regular income so returns are usually reinvested for exponential growth. They are willing to accept some loss of value in their portfolio capital to achieve higher expected returns. Over 70 Aggressive growth Investors main goal is strong, quick growth of net worth. Typically they are willing to accept high market volatility to pursue their investment objectives. They are willing to assume significant temporary loss of investment as a result of market value movements of assets they are commonly exposed to. Customer Signature Risk Validation Advisor Signature Date Investor Profile Questionnaire 7
Portfolio Structure CODE: CUSTOMER: Capital preservation Conservative income Investor Profile Questionnaire 8
Moderate income Moderate Growth Investor Profile Questionnaire 9
Aggressive Growth Adviser: Customer: Date: / / Investor Profile Questionnaire 10