FinaMetrica Personal Risk Profile

Personal Risk Profile

Questionnaire completed by Robert on 02/09/2009 and
Mary on 02/11/2009
Your Risk Tolerance Score Robert (Risk Group 4)
Your Risk Tolerance Score enables you to compare yourself to a representative sample of
the adult population.
Robert, your score is 52.
This is a slightly-higher-than-average score, higher than 56% of all scores.

You estimated your score would be 48. Congratulations! You were close. Most people
under-estimate their score by a few points.
Mary, your score is 59.
This is a high score, higher than 80% of all scores.

You estimated your score would be 55. Congratulations! You were close. Most people
under-estimate their score by a few points.
Your Risk Group
When scores are graphed they form a bell curve as shown to the right. To make the scores
more meaningful, the 0 to 100 scale has been divided into seven Risk Groups. Mary (Risk Group 5)

Robert, your score places you in Risk Group 4 as shown to the right.
Mary, your score places you in Risk Group 5 as shown to the right.

Your Risk Profile

Your Risk Profile has been prepared from information provided by you and is, of course,
only relevant to you.
If you are one of a couple who make joint investment decisions your partner should also do
a risk tolerance assessment. Both Risk Profiles then need to be considered when joint
decisions are being made.

While the information provided by your Risk Tolerance Score is essential to making
appropriate investment decisions, it is not sufficient by itself. You should also consider the
cost, time horizon and relative priorities of the Financial Goals you need your investments to
help you fund. This can only be accomplished when your Risk Tolerance Score is considered
within the context of an overall Financial Goal Plan.

© FinaMetrica Pty Limited All Rights Reserved.

See Important Disclosures section in this Report for explanations of assumptions, limitations, methodologies, and a glossary.

Prepared for : Robert and Mary Sample Prepared by : John Poels

02/11/2009 Page 1 of 8
FinaMetrica Personal Risk Profile
Robert's Risk Profile Group Comparison
Your Risk Group Investment
The description of Risk Group 4 which follows provides a summary of the typical attitudes, Most commonly they feel it is somewhat more important that the value of their investments
values, preferences and experiences of those in your group. Two of your answers differed retains its purchasing power than that it does not fall. Over ten years, most expect an
from this description. They are shown in italics below the relevant section. These differences investment portfolio to earn, on average, from one and a half to twice the rate from CDs
fine-tune the description to you personally. (certificates of deposit). Typically, they would begin to feel uncomfortable if the total value of
their investments went down by 20%.
Making Financial Decisions Given these portfolio choices,
They usually think of "risk" as "uncertainty". They have a reasonable amount of confidence Expected Return and Risk
in their ability to make good financial decisions and usually feel at least somewhat optimistic
about their major financial decisions after they make them. High Medium Low
They are prepared to take a medium degree of risk with their financial decisions and are Portfolio 1 0% 0% 100 %
usually, if not always, more concerned about the possible gains than the possible losses. Portfolio 2 0% 30 % 70 %
When faced with a major financial decision you are usually, but not always, more concerned Portfolio 3 10 % 40 % 50 %
about the possible losses.
Portfolio 4 30 % 40 % 30 %
Financial Disappointments Portfolio 5 50 % 40 % 10 %
Typically, when things go wrong financially they adapt at least somewhat easily. Portfolio 6 70 % 30 % 0%
Portfolio 7 100 % 0% 0%
Financial Past where stocks and real estate are high return/high risk and cash and CDs are low return/low
They have taken a small to medium degree of risk with their past financial decisions. Most risk, their most common choice is Portfolio 4.
have never borrowed money to make an investment. The great majority have never invested If the total value of all your investments went down by as little as 10% you would begin to
a large sum in a risky investment mainly for the "thrill" of seeing whether it went up or feel uncomfortable.
down in value.
Borrowing
If they were borrowing a large sum of money at a time when it was not clear which way
interest rates were going to move and when the fixed interest rate was 1% more than the
then variable rate, they would choose to have 50% to 75% of the loan at variable interest.

Government Benefits and Tax Advantages

So long as there was only a small chance they could finish up worse off than if they'd done
nothing, they would take a risk in arranging their affairs to qualify for a government benefit
or obtain a tax advantage.

© FinaMetrica Pty Limited All Rights Reserved.

See Important Disclosures section in this Report for explanations of assumptions, limitations, methodologies, and a glossary.

Prepared for : Robert and Mary Sample Prepared by : John Poels

02/11/2009 Page 2 of 8
FinaMetrica Personal Risk Profile
Mary's Risk Profile Group Comparison
Your Risk Group Investment
The description of Risk Group 5 which follows provides a summary of the typical attitudes, Most feel that it is at least somewhat more important that the value of their investments
values, preferences and experiences of those in your group. Three of your answers differed retains its purchasing power than that it does not fall. Over ten years, most expect an
from this description. They are shown in italics below the relevant section. These differences investment portfolio to earn, on average, from two to two and a half times the rate from
fine-tune the description to you personally. CDs (certificates of deposit). Typically, they would begin to feel uncomfortable if the total
value of their investments went down by 20%.
Making Financial Decisions Given these portfolio choices,
Most think of "risk" as "opportunity" and have a reasonable amount, if not a great deal, of Expected Return and Risk
confidence in their ability to make good financial decisions. They usually feel at least
somewhat optimistic about their major financial decisions after they make them. High Medium Low
They are prepared to take a medium degree of risk with their financial decisions and are Portfolio 1 0% 0% 100 %
usually, if not always, more concerned about the possible gains than the possible losses. Portfolio 2 0% 30 % 70 %
Portfolio 3 10 % 40 % 50 %
Financial Disappointments
Portfolio 4 30 % 40 % 30 %
Typically, when things go wrong financially they adapt at least somewhat easily.
Portfolio 5 50 % 40 % 10 %
Financial Past Portfolio 6 70 % 30 % 0%
They have taken a medium degree of risk with their past financial decisions. About half have Portfolio 7 100 % 0% 0%
borrowed money to make an investment. Most have never invested a large sum in a risky where stocks and real estate are high return/high risk and cash and CDs are low return/low
investment mainly for the "thrill" of seeing whether it went up or down in value. risk, their most common choice is Portfolio 5.
You have never borrowed money to make an investment. If the total value of all your investments went down by as little as 10% you would begin to
feel uncomfortable.
With these portfolio choices, you would choose Portfolio 4.

Borrowing
If they were borrowing a large sum of money at a time when it was not clear which way
interest rates were going to move and when the fixed interest rate was 1% more than the
then variable rate, they would choose to have at least 50% of the loan at variable interest.

Government Benefits and Tax Advantages

So long as there was only a small chance they could finish up worse off than if they'd done
nothing, they would take a risk in arranging their affairs to qualify for a government benefit
or obtain a tax advantage.

© FinaMetrica Pty Limited All Rights Reserved.

See Important Disclosures section in this Report for explanations of assumptions, limitations, methodologies, and a glossary.

Prepared for : Robert and Mary Sample Prepared by : John Poels

02/11/2009 Page 3 of 8
FinaMetrica Personal Risk Profile
Questionnaire completed by Robert on 02/09/2009 and Mary on 02/11/2009.
1. Compared to others, how do you rate your willingness to take financial risks? 5. If you had to choose between more job security with a small pay increase and less job
Extremely low risk taker. security with a big pay increase, which would you pick?
Very low risk taker. Definitely more job security with a small pay increase.
Low risk taker. Probably more job security with a small pay increase.
Average risk taker. Not sure.
High risk taker. Probably less job security with a big pay increase.
Very high risk taker. Definitely less job security with a big pay increase.
Extremely high risk taker. 6. When faced with a major financial decision, are you more concerned about the
possible losses or the possible gains?
2. How easily do you adapt when things go wrong financially?
Always the possible losses.
Very uneasily.
Usually the possible losses.
Somewhat uneasily.
Usually the possible gains.
Somewhat easily.
Always the possible gains.
Very easily.
7. How do you usually feel about your major financial decisions after you make them?
3. When you think of the word "risk" in a financial context, which of the following
Very pessimistic.
words comes to mind first?
Danger. Somewhat pessimistic.
Uncertainty. Somewhat optimistic.
Opportunity. Very optimistic.
Thrill. 8. Imagine you were in a job where you could choose whether to be paid salary,
commission or a mix of both. Which would you pick?
4. Have you ever invested a large sum in a risky investment mainly for the "thrill" of
All salary.
seeing whether it went up or down in value?
No. Mainly salary.
Yes, very rarely. Equal mix of salary and commission.
Yes, somewhat rarely. Mainly commission.
Yes, somewhat frequently. All commission.
Yes, very frequently.

© FinaMetrica Pty Limited All Rights Reserved. Robert Mary Both

See Important Disclosures section in this Report for explanations of assumptions, limitations, methodologies, and a glossary.

Prepared for : Robert and Mary Sample Prepared by : John Poels

02/11/2009 Page 4 of 8
FinaMetrica Personal Risk Profile
Questionnaire completed by Robert on 02/09/2009 and Mary on 02/11/2009.
9. What degree of risk have you taken with your financial decisions in the past? 13. Suppose that 5 years ago you bought stock in a highly regarded company. That same
Very small. year the company experienced a severe decline in sales due to poor management. The
price of the stock dropped drastically and you sold at a substantial loss.
Small.
Medium. The company has been restructured under new management, and most experts now
Large. expect it to produce better than average returns. Given your bad past experience with
this company, would you buy stock now?
Very Large.
Definitely not.
10. What degree of risk are you currently prepared to take with your financial decisions? Probably not.
Very small. Not sure.
Small. Probably.
Medium. Definitely.
Large.
14. Investments can go up or down in value, and experts often say you should be prepared
Very large.
to weather a downturn. By how much could the total value of all your investments go
down before you would begin to feel uncomfortable?
11. Have you ever borrowed money to make an investment (other than for your home)?
Any fall would make me feel uncomfortable.
No.
10%.
Yes.
20%.
12. How much confidence do you have in your ability to make good financial decisions? 33%.
None. 50%.
A little. More than 50%.
A reasonable amount.
15. Assume that a long-lost relative dies and leaves you a house which is in poor condition
A great deal. but is located in a suburb that's becoming popular.
Complete.
As is, the house would probably sell for $300,000, but if you were to spend about
$100,000 on renovations, the selling price would be around $600,000. However, there
is some talk of constructing a major highway next to the house, and this would lower
its value considerably.

Which of the following options would you take?

Sell it as is.
Keep it as is, but rent it out.
Take out a $100,000 mortgage and do the renovations.

© FinaMetrica Pty Limited All Rights Reserved. Robert Mary Both

See Important Disclosures section in this Report for explanations of assumptions, limitations, methodologies, and a glossary.

Prepared for : Robert and Mary Sample Prepared by : John Poels

02/11/2009 Page 5 of 8
FinaMetrica Personal Risk Profile
Questionnaire completed by Robert on 02/09/2009 and Mary on 02/11/2009.
16. Most investment portfolios have a mix of investments - some of the investments may 18. With some types of investment, such as cash and CDs (certificates of deposit), the
have high expected returns but with high risk, some may have medium expected value of the investment is fixed. However inflation will cause the purchasing power of
returns and medium risk, and some may be low-risk/low-return. (For example, stocks this value to decrease.
and real estate would be high-risk/high-return whereas cash and CDs (certificates of
deposit) would be low-risk/low-return.) With other types of investment, such as stocks and real estate, the value is not fixed. It
will vary. In the short term it may even fall below the purchase price. However over the
Which mix of investments do you find most appealing? Would you prefer all long term, the value of the stocks and real estate should certainly increase by more
low-risk/low-return, all high-risk/high-return, or somewhere in between? than the rate of inflation.

Mix of Investments in Portfolio 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?
High Medium Low Much more important that the value does not fall.
Somewhat more important that the value does not fall.
Risk/Return Risk/Return Risk/Return
Portfolio 1 0% 0% 100 % Somewhat more important that the value retains its purchasing power.
Portfolio 2 0% 30 % 70 % Much more important that the value retains its purchasing power.
Portfolio 3 10 % 40 % 50 % 19. In recent years, how have your personal investments changed?
Portfolio 4 30 % 40 % 30 % Always toward lower risk.
Portfolio 5 50 % 40 % 10 % Mostly toward lower risk.
Portfolio 6 70 % 30 % 0% No changes or changes with no clear direction.
Portfolio 7 100 % 0% 0% Mostly toward higher risk.
17. You are considering placing one-quarter of your investment funds into a single Always toward higher risk.
investment. This investment is expected to earn about twice the CD (certificate of
deposit) rate. However, unlike a CD, 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?
Zero, i.e. no chance of any loss.
Very low chance of loss.
Moderately low chance of loss.
50% chance of loss.

© FinaMetrica Pty Limited All Rights Reserved. Robert Mary Both

See Important Disclosures section in this Report for explanations of assumptions, limitations, methodologies, and a glossary.

Prepared for : Robert and Mary Sample Prepared by : John Poels

02/11/2009 Page 6 of 8
FinaMetrica Personal Risk Profile
Questionnaire completed by Robert on 02/09/2009 and Mary on 02/11/2009.
20. When making an investment, return and risk usually go hand-in-hand. Investments 22. People often arrange their financial affairs to qualify for a government benefit or
which produce above-average returns are usually of above-average risk. With this in obtain a tax advantage. However a change in legislation can leave them worse off than
mind, how much of the funds you have available to invest would you be willing to if they'd done nothing.
place in investments where both returns and risks are expected to be above average?
None. With this in mind, would you take a risk in arranging your affairs to qualify for a
government benefit or obtain a tax advantage?
10%.
I would not take a risk if there was any chance I could finish up worse off.
20%.
I would take a risk if there was only a small chance I could finish up worse off.
30%.
I would take a risk as long as there was more than a 50% chance that I would finish
40%. up better off.
50%.
60%. 23. Imagine that you are borrowing a large sum of money at some time in the future. It's
not clear which way interest rates are going to move - they might go up, they might
70%. go down, no one seems to know.
80%.
90%. You could take a variable interest rate that will rise and fall as the market rate changes.
Or you could take a fixed interest rate which is 1% more than the current variable rate
100%.
but which won't change as the market rate changes. Or you could take a mix of both.
21. Think of the average rate of return you would expect to earn on an investment
How would you prefer your loan to be made up?
portfolio over the next ten years. How does this compare with what you think you
would earn if you invested the money in one-year CDs (certificates of deposit)? 100% variable.
About the same rate as from CDs. 75% variable, 25% fixed.
About one and a half times the rate from CDs. 50% variable, 50% fixed.
About twice the rate from CDs. 25% variable, 75% fixed.
About two and a half times the rate from CDs. 100% fixed.
About three times the rate from CDs.
24. Insurance can cover a wide variety of life's major risks - theft, fire, accident, illness,
More than three times the rate from CDs. death etc. How much coverage do you have?
Very little.
Some.
Considerable.
Complete.

© FinaMetrica Pty Limited All Rights Reserved. Robert Mary Both

See Important Disclosures section in this Report for explanations of assumptions, limitations, methodologies, and a glossary.

Prepared for : Robert and Mary Sample Prepared by : John Poels

02/11/2009 Page 7 of 8
FinaMetrica Personal Risk Profile
Questionnaire completed by Robert on 02/09/2009 and Mary on 02/11/2009.
25. 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.

What do you think your score will be?

Robert's estimated score : 48
Mary's estimated score : 55

© FinaMetrica Pty Limited All Rights Reserved. Robert Mary Both

See Important Disclosures section in this Report for explanations of assumptions, limitations, methodologies, and a glossary.

Prepared for : Robert and Mary Sample Prepared by : John Poels

02/11/2009 Page 8 of 8