Morningstar Risk Tolerance Questionnaire

Your Details

Full Name *

Mobile *

Email *

NI Number

Investment Goal

1. What is your main investment goal?

Think about what you are saving for. Do you expect your savings to grow for a future payout — for example, retirement or a child's education — or to increase your money or leave an inheritance? Or will you use these savings to add to your income immediately?

A. Income B. Growth

Any additional details about your investment goals:

How Losing Money Would Affect You

2. What impact would it have on your standard of living if you were to lose money on this investment?

Losing money here refers to the value of your investment portfolio falling below the amount you originally invested because of a drop in the market. For example, if you gave your adviser £50,000 to invest and later the value fell to £47,500.

A. It wouldn't have an impact on my standard of living and I wouldn't need to use any additional resources (e.g. savings) as a result. B. I have other resources I could fall back on. C. It would have an impact on my immediate standard of living.

Time Frame

3. When do you want to start spending the money you will save in this account?

A. Immediately or within the next three years B. Within three to four years C. Within five to six years D. Within seven to 10 years E. Not within the next 10 years

4. Once you start spending your money, how long do you expect to continue to withdraw funds from your investment portfolio?

Do you want to spend all your money at once (e.g. to buy a house)? Or do you plan to make the money last over a longer period (e.g. paying yourself a yearly income once you retire)?

A. I plan to withdraw all of my money at once. B. I will make withdrawals over two to five years. C. I will make withdrawals over six to 10 years. D. I will make withdrawals over 10 years or more. E. I don't intend to withdraw the money.

5. Once you start to spend the money in your investment portfolio, how much do you plan to withdraw?

If your investments are worth £100,000 and you want to withdraw a yearly income of 4%, you will need to take out £4,000 each year.

A. I do not intend to take withdrawals. B. I plan to withdraw between 0% and 4% of the value of my investments each year. C. I plan to withdraw between 4% and 8% of the value of my investments each year. D. I plan to withdraw more than half of the value of my investments within three to 10 years. E. I plan to withdraw all of my investments at once.

Your Attitude to Risk

6. Some investments offer the opportunity for a greater gain but with the risk of a greater potential loss. Look at the five scenarios below. Which one would you put your money in?

Maximum gain

Maximum loss

40 30 20 10 0 −10 −20

17%

−12%

Scenario A

23%

−15%

Scenario B

28%

−19%

Scenario C

34%

−22%

Scenario D

39%

−25%

Scenario E

7. Imagine you have invested £100,000. Which of the five scenarios below would you want for your investment portfolio?

← Scroll table to see all columns

	Best-case increase (£)	Most likely result (£)	Worst-case losses (£)
Scenario 1	17,000	4,500	−12,000
Scenario 2	23,000	6,000	−15,000
Scenario 3	28,000	7,000	−19,000
Scenario 4	34,000	8,000	−22,000
Scenario 5	39,000	9,000	−25,000

8. Which of the following statements best describes your attitude to risk?

A. I am most concerned with risk. I am willing to accept lower returns in order to limit the risk of loss. B. I am willing to accept some risk and chance of loss in an effort to achieve modest but somewhat higher returns. C. I am willing to accept moderate risk in order to achieve higher returns. Reducing risk and increasing returns are equally important to me. D. I want to achieve strong returns on my investments. I am willing to accept somewhat higher risk and chance of loss. E. I am mainly concerned with getting the highest possible returns. I am willing to accept significant rises and falls in value and a significant chance of loss.

9. Imagine your adviser has invested £100,000 of your money and it's fallen in value to £80,000. Assuming this happens at an early stage of your investment period, how would you react?

A. I would not change my investment plan. B. I would wait at least one year before changing to investment options that are more stable. C. I would wait at least six months before changing to investment options that are more stable. D. I would immediately change to investment options that are more stable.

10. The value of investments varies from year to year. Suppose you invested £100,000. How much money would you need to lose before you wanted to move your money into a more stable investment?

A. £5,000 or less B. £10,000 C. £15,000 D. £20,000 E. It is unlikely I will move my money even if my investment falls in value.

11. How does your concern about losing money manifest itself in relation to your investment?

A. I would sell my investments. B. I would be worried but not uncomfortable enough to sell my investments immediately. If my investments suffered losses over several months, I would probably sell. C. I would wait a full year before making changes to my investments — short-term losses in the value of my investments do not bother me. D. I would not make changes — I understand that investments can have occasional negative yearly returns. However, I have a higher chance of reaching my investment goals if I stick with my investment over the long term.

12. Which of the following best describes your view on investing?

A. My investments don't have to grow, I just want my money to be safe. B. I can accept lower growth for greater certainty. C. I am more concerned about the possible losses than the possible gains. D. I can accept possible losses for long-term investment growth. E. To achieve high levels of growth, it is necessary to take risk.

13. Capacity for Loss

Capacity for loss refers to how much risk investors can afford to take — the ability to absorb falls in the value of investments and the extent to which loss of capital would have a materially detrimental effect on standard of living.

1. None

I/We cannot afford for my/our investments to fall in value as it will have a serious impact on my/our standard of living.

2. Low

I/We have sufficient savings to withstand some losses in the shorter term, however long term losses may impact my/our living standards.

3. Medium

I/We have sufficient assets outside of my/our portfolio and/or an investment time horizon far enough in the future to withstand small to medium losses without any detrimental effect to my/our living standards.

4. High

I/We have a high net worth with significant savings, a reliable income, other accessible assets, low debt and/or a sufficient investment time horizon to absorb medium to large losses in your portfolio without a detrimental effect to my/our living standards.

Client Signature

Please type your full name below as your electronic signature, and include today's date.

Signature (full name) *

Date *

Second signatory (if applicable):

Signature (full name)

Date

© Morningstar, 2016 — This document is not an invitation to buy or sell any product and should not be considered a personalised recommendation. You should not base an investment decision on this information alone. Please contact a financial adviser before making an investment decision.

Risk Tolerance Questionnaire

Thank you!