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Client Investment Risk Profile V2

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Important Notice to Clients

In order for us to provide financial advice to you, we need to have a reasonable basis for that advice. The information requested in this Client Investment Risk Profile is one of the tools we use to establish a basis for the advice we will provide. It is therefore important for you to complete this document as accurately and fully as possible. Failure to do so could result in advice being provided that is not appropriate to your individual needs, circumstances and objectives.


Name(Required)

About risk tolerance testing

This profile has been designed to assist your financial adviser to assess your risk tolerance in relation to financial risk. The results of the questionnaire are to be used as a guide for your financial adviser in addition to other information in regard to your personal circumstances to develop appropriate recommendations.

Once your financial adviser has assisted you to identify your risk tolerance it will be used by your financial adviser in conjunction with other information such as aspirations and needs, current financial situation and other relevant personal information to develop recommendations to maximise your investment and taxation strategies.

An individual's risk tolerance is an important factor in making investment decisions and may also be used in other contexts such as risk insurance, risk management etc.

The most important factor in making investment decisions is to have an understanding of the risks involved in making such decisions. Financial or investment risk is generally defined as the risk that the investment decision may not meet expectations or not achieve an individual's stated objectives. Risk tolerance is a measure of an individual's level of comfort in relation to investment or financial risk.

The questionnaire

Risk tolerance testing is not only a measure of an individual's psychological aspects towards financial risk, but considers many other factors that are predictors of an individual's risk tolerance. Some of these predictors include your locus of control, general knowledge and past experiences.

The profiler is a multi-dimensional tool that combines demographic, socio-economic, financial knowledge, locus of control and other factors into a single tool to assist in determining an individual's risk tolerance. It has been designed to determine many of the key predictors of an individual's risk tolerance. The question segments cover the following areas:
• Demographic data collection.
• General investment knowledge.
• Measurement of psychological aspects such as attitudes to investment, emotions, personal beliefs and knowledge levels.
• Hypothetical situations.
• An individual's locus of control (an individual's perceived ability to control their future).
• Past experiences.
• Attitudes towards different types of risk.
• An individual's views on investment time frames.

Why are so many questions required?

There are a total of 27 questions. The first 7 of these are questions to collect demographic information about you. The number of questions is required in order to provide an accurate assessment of your risk tolerance. As we explained above, there are many different individual aspects or risk tolerance predictors that need to be measured.

How do I answer questions that contain hypothetical situations?

There are questions in the profiler questionnaire that are based on hypothetical situations. These questions are designed to assess how you may react in a similar situation, even though you may not have been in this situation. Please do your best to imagine the situation and provide an answer.

The Role of Your Financial Adviser

Your financial adviser will use your risk tolerance assessment in addition to other personal information to develop appropriate recommendations. Your risk-tolerance report is designed to assist your financial adviser in satisfying their legal requirements including “know your client rule”. Section 945A (1) of Corporations Act 2001 which requires financial planners to have a “reasonable basis for making a recommendation” this is dealt with further under ASIC policy statement 175.

As your risk tolerance will change dependant upon your experiences and further education your financial adviser may also reassess your risk tolerance periodically.

The Role of Monash University

The Department of Econometrics and Business Studies at Monash University has publicly endorsed this profiler as an appropriate method for assessment of an investor's investment risk grouping. Monash University has conducted statistical analysis of the results obtained by the product and has confirmed that the results meet a high degree of measurement accuracy. Monash University will continue to be involved with its on-going development.

The Questionnaire does not constitute financial advice and is a tool to assist licensed financial advisers with determining the objectives, financial situation and needs of the client in their preparation of general or personal financial advice and should not be relied upon as the sole factor in preparing a recommendation. Information collected in this questionnaire should be dealt with in accordance with the Privacy Act 1988 (Cth). Fintech does not accept any liability, whether direct, indirect arising from the use of information contained in this report.

Section 1

1.1 What is your marital status?(Required)
1.2 In which sector are you currently employed or sector you were previously employed?(Required)

Section 2

2.1 I usually get what I want in life.(Required)
2.2 If I do not succeed on a task, I tend to give up.(Required)
2.3 I never try anything that I am not sure of.(Required)
2.4 A person can get rich by taking risk.(Required)
2.5 Persistence and hard work usually lead to success.(Required)

Section 3

3.1 When considering taking financial risks, how do you view yourself?(Required)
3.2 Which of the following statements best describes your investment knowledge and understanding when considering investment?(Required)
3.3 Investment is too difficult to understand.(Required)
3.4 I am more comfortable putting my money in a bank account than in the share market.(Required)
3.5 Making money in shares and bonds is based on luck.(Required)
3.6 The best way to reduce financial risk is to diversify.(Required)
3.7 During times of higher inflation it can be more expensive to borrow money due to high interest rates.(Required)
3.8 Many types of investments can fluctuate up and down in value. Financial services professionals state that you should be able to endure downturns in the value of your investments over short-term periods. Based on the answers below, by how much could your investment fall in value over a short-term period before you feel uncomfortable?(Required)

Section 4

4.1 When you have made a significant financial decision, which of the following best describes how you usually feel after making such a decision?(Required)
4.2 If you were confronted with a significant financial decision in relation to an investment, would you be more concerned about the potential losses or the potential gains?(Required)
4.3 If you have ever invested a significant amount of money into an investment that fluctuates up and down in value, how did it make you feel when the investment fell in value?(Required)
4.4 When financial decisions you have made in the past have not turned out to be as successful as you had planned, which of the following statements best describes how you felt?(Required)
4.5 If you have ever borrowed money to make an investment other than your home, what type of investment was it?(Required)
4.6 Based on your answer to question 4.5, how did borrowing to invest make you feel?(Required)

Section 5

5.1 Suppose you unexpectedly inherited a large sum of money, you are debt free and wanted to invest the money for your future. Which of the following investments would you consider most appropriate?(Required)
5.2 Suppose that two years ago you purchased shares in a company that was recommended to you by experts due to the future business prospects of that company. After a two year period of the share market being in a downward trend (a bear market) the shares of the company were trading at a lower price than what you paid for them. You subsequently receive expert advice that confirms that even though the share price is lower due to the share market conditions over the last two years, the future prospects of the company are even stronger than previously advised. Given that your shares in this company are already trading at a loss, would you buy more shares in this company based on the latest expert advice?(Required)
5.3 A retirement income stream provides regular income usually in the form of a pension payment and is generally purchased using your savings and superannuation benefits. Retirement income streams come in many forms and vary as to the level of flexibility and control that a person has over the income stream, the underlying investment and whether or not your beneficiaries will receive the remaining value of your investment in the event of your death. Assume you invested your life savings into a retirement income stream, what are the features that would be the most important to you?(Required)
5.4 Investment gearing is the process of borrowing money to invest, although gearing can increase the potential return significantly and often provide taxation benefits; it also significantly increases the level of risk. Suppose a financial planner recommended that you borrow money to invest in a portfolio of managed funds and shares, which of the following would best describe your reaction?(Required)
5.5 One of the major aspects of financial planning is to organise your financial affairs to minimise the impact of taxation and maximise any available government benefits, such as the age pension or similar benefit. After organising your financial affairs in this way, a change in legislation could leave you in a worse position or no better off. In consideration of this issue, would you organise your affairs in this way in order to qualify for a government benefit or to minimise taxation, and bear the risk that the legislation may change?(Required)
5.6 Suppose that you have set an objective to retire at a particular age and have also determined the lifestyle you require in retirement. Your financial planner has advised you that in order to achieve the lifestyle you require in retirement at the specified age, you will need to make investments of a higher risk than you would normally feel comfortable with. Which of the following options would you feel most comfortable with?(Required)
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