OMW Attitude to Risk Questionnaire

WFP Combined Risk Questionnaire for OMW Clients

Please Select Your Financial Adviser

This document is part of our process in establishing your level of risk tolerance and ability to bear losses which are crucial to ensuring the recommendations we make are suitable and appropriate.

We understand that individuals respond differently depending on how information is presented and communicated, and we therefore use various methods to assess your thoughts, attitudes and experiences when making financial investment decisions.

We would be grateful if you could take the time to complete this form and should you have any questions, please do not hesitate to contact us.

In case there is anything else you consider relevant, please provide details in the box below:

Section 1

This will help us to understand the type of investment assets you are considering when completing the form, the length of time you are looking to invest and whether you have any views on the investment strategy you wish to use.

Please read the introductory comments below and then answer/select the most appropriate option based on your current thoughts and motivations.

A. Please identify the assets you are considering when completing this questionnaire. We aim to establish whether you are thinking about all your investable assets or perhaps just your pension (for example).

I am just considering certain assets

I am considering all of my assets

B. It is important to understand when you may wish to fully encash the funds you are investing as this will help us identify whether you are considering a shorter or longer investment period. The considerations for short term investment periods, of say two years may be different than if you were looking at investments which you don’t need to access for ten years or more.

I am looking at VERY SHORT TERM investing at this stage: [I expect to withdraw my funds in full within the next three years]

I am looking at SHORT TERM investing at this stage: [I expect to withdraw my funds in full within the next nine years]

I am looking at MEDIUM TERM investing at this stage: [I expect to withdraw my funds in full within the next nineteen years]

I am looking at LONG TERM investing at this stage: [I do not expect to withdraw my funds in full for at least twenty years]

C. I understand that in considering any investment strategy, I am taking the risk that my investment can experience capital losses, and that it may be worth less over any time period than it was worth in the preceding time period.

I understand and accept this risk

I do not accept this risk and understand it is likely no investment recommendation will be possible

D. How would you define your experience of investing?

I have little or no experience

I have some knowledge of investments and how they work

I have previously invested in a range of different investments

I have actively engaged with investments and have a good knowledge of how they work

E. Personal Preferences in your Investment Strategy

We wish to understand if you have any preferences on the type of investment strategy or funds you would like us to consider when preparing our recommendations. The questions below are designed to help identify any preferences you may have. We will discuss these with you to help identify your reasons for the preferences and explain how they will affect our investment fund recommendations. If you wish to provide any supporting details or commentary, please provide these in the box on the previous page of this questionnaire.

Active or Passive Investing

Passive investing tracks a certain market benchmark, such as the FTSE 100 index, and aims to achieve performance as close to that benchmark’s performance as possible. The funds will aim to mirror the relevant index (or group of indices) and do not intend to outperform the benchmarks they are tracking. These funds generally provide diversification across different asset classes and geographical regions by tracking a range of indices.

Active investing is where a fund manager tries to beat the performance of the fund’s target or benchmark. These funds are where the skill and experience of the managers really come in to play. Fund Managers have discretion to change the asset type and individual stock selection if they feel this will improve returns.

Active investing is more expensive than passive as the fund managers need research analysts and there is a greater level of trading (buying and selling stocks).

I prefer an active investment strategy, despite its additional cost

I prefer a passive investment strategy

I understand the difference in these investment styles and have no preference

I do not understand the difference between these investment styles

Other Considerations

An investors’ objectives do not always include purely economic goals. All fund managers must adhere to strict rules on how they invest but some clients wish to choose investments that specifically reflect their moral views or religious beliefs.

Socially responsible investing is where individuals choose to avoid investing in firms they consider may cause harm to people or the planet (e.g. companies who produce or sell addictive substances such as alcohol or tobacco) or only invest in companies or industries they believe will have a positive impact for people or the planet (e.g. companies engaged in social justice or environmental sustainability).

Religious based investing is where individuals invest in accordance with the beliefs and principles of their faith, e.g. Shariah Law.

Many businesses are now acutely aware of the impact of their activities on the environment. Accessing these types of investments no longer necessarily means that you will be paying higher charges or having to accept lower returns to follow your principles.

Please indicate below if you have views or preferences that may influence your investment strategy which we will then discuss with you in more detail.

No preference

I have religious beliefs that will influence my investment strategy

Socially responsible investing is important to me

Section 2

This is a series of questions which are designed to assess your thoughts and experiences when making financial investment decisions.

Please answer the following questions which ask about your thoughts, attitudes and experiences when making financial investment decisions. There are no right or wrong answers. They are used to help assess your level of risk tolerance and ability to bear losses when making investment decisions. Please answer every question even if you feel it doesn’t really apply to you.

1. When do you think you’ll need this money or draw an income from it, or how long do you want or expect to hold on to this investment? (The time period is critical in the risk assessment process)

2. Do you have an emergency fund to provide for unexpected expenses, to avoid needing to draw on medium-to-long-term savings to meet immediate needs? (You should allow the equivalent of at least three months net income for emergencies) Please tick

Yes - but less than three months' salary

Less than six months’ salary

Around one years’ salary

More than two years’ salary

3. What is your expectation of future earnings over the next five years?

I expect my earnings to decrease

I expect my earnings to keep pace with inflation

I expect my earnings to increase somewhat ahead of inflation

I expect my earnings to fluctuate

I expect my earnings to far outstrip inflation (only consider this answer if it relates to an Investment, not a Pension)

I expect to retire shortly (only consider this answer if it relates to a Pension, not an Investment)

4. What percentage of your total assets (excluding your home) are you proposing to invest now?

Less than 25%

25% to less than 50%

50% to less than 75%

75% or more

5. Which statement most closely reflects your current financial situation?

I am completely debt free

I have no mortgage but have a few other obligations like credit card payments

I have a mortgage but no other debts that concern me

I have a mortgage and some short term obligations

I have a lot of long term obligations

6. Which statement best describes your objectives for this investment?

Stability is more important than higher returns

I want to achieve higher long-term returns than cash. I could cope with infrequent periods where my investments might fall in value

I want to achieve higher medium-term returns than inflation. I understand there may be occasional extended periods where my investments might fall in value

I want the best long-term returns I can get. I fully expect periods where the value of my investments might suffer extended falls

7. At the beginning of the year you have £100,000 invested. The chart and options below show the performance of four possible investments. Each bar gives a range of possible values at the end of the same year. Which investment would you prefer?

Portfolio A: It could be worth anywhere between £93,000 and £113,000

Portfolio B: It could be worth anywhere between £85,000 and £125,000

Portfolio C: It could be worth anywhere between £77,000 and £137,000

Portfolio D: It could be worth anywhere between £69,000 and £149,000

8. What level of fall in the value of this investment over a one-year period would concern you, bearing in mind this is generally a medium-long-term investment?

More than 5%

More than 10%

More than 15%

More than 20%

I am not concerned about falls in value as I expect to recover any falls by the time I need to sell my portfolio

9. Suppose one year ago you invested £100,000 in a portfolio. Today you have checked its value and find it is worth £87,000. How would you feel?

Panic- I would want my adviser to sell, and invest the proceeds in Cash

Nervous – I would want my adviser to sell part of the portfolio, and invest the proceeds in a less volatile investment

Patient – I would sit tight, expecting the portfolio to recover

Positive – If I had any more money I would invest it in the same portfolio

10. You are more concerned that your investments grow faster than inflation than you are about returns over any one-year period.

Strongly agree

Agree

Disagree

Strongly disagree

11. If you could increase your chances of improving your returns by taking more risk, would you be?

Willing to take more risk with all the money

Willing to take more risk with half of the money

Willing to take more risk with a quarter of the money

Unlikely to take much more risk

Are you completing this in relation to a pension?

Yes

12. If you were advised that your current fund and future savings were not sufficient to meet your retirement goals, what action would you take?

Take more risk with all the money to try to improve returns

Take more risk with half of the money and increase your savings

Increase savings sufficiently to achieve your goals

Amend your goals and make no changes to the investment risk or savings levels

13. What is your attitude towards purchasing an annuity* to provide income in your retirement? (*Annuity – this is the contract you purchase from an annuity provider using a lump sum of money (e.g. proceeds of your pension fund) to guarantee an annual income for life or a pre agreed set period of time)

My preferred option to any other form of retirement income

I would only buy an annuity if the terms were attractive compared with other options

I would not consider an annuity unless forced by circumstances at the time

14. Which of the following statements best describes your other retirement (pension) provisions?

I expect to receive state pension benefits

In addition to the state pension, I have a personal/company pension but together they are unlikely to satisfy my basic retirement needs

In addition to the state pension, I have a personal/company pension and together they will cover my basic retirement needs

I have sufficient pension and other savings to provide an income equivalent to two-thirds of my anticipated pre-retirement salary

Capacity for Loss Questions

The following questions do not impact the results of your Risk Questionnaire and are designed to establish what risks you can realistically afford to take.

Is this investment a significant proportion of your total wealth?

Yes

Is this investment providing your daily living expenses?

Yes

How much would your standard of living be affected if the income/capital from this investment were to fall below your expectations?

It would have a significant impact. I cannot afford for this income/capital to decrease and I would struggle financially

It would cause me to re-assess my standard of living and make some cut backs

Not much as I have alternative investments or sources of income to maintain my lifestyle

If you needed sudden access to a lump sum, would you consider taking it from this investment?

I have no other alternative. I would most certainly need to access this investment

I would consider taking funds from this investment if necessary

No. I have other savings that I can use for emergencies

Approximately how much income do you have each month after all normal expenditure?

I have no regular monthly surplus income

I have surplus income at least once every 3 months

I have surplus income every month

I have significant surplus income every month

Section 3

We would like your views based on a graphical example of the average annual investment returns you may achieve at each level of investment risk from 1 to 10 as well as the maximum probable gains or losses you may experience at each level. The graphs show how a portfolio of assets might perform over the next 12 months based on our analysis of generic asset classes. It is not an analysis of how specific products or funds might perform, improve on or reduce these growth rates. The figures used are only examples of what might happen, are not minimum or maximum amounts nor are guaranteed in any way.

There are three graphs, which vary depending on the length of time you are intending to hold the investment.

Short-term investment Period - up to 9 years
Medium-term investment period - 10 years to 19 years
Long-term investment period - 20 years or more

As an example, the Medium-Term investment period graph demonstrates the average growth you may achieve in portfolio 6 is +7.1% per annum but you could experience a gain of up to +33% or a loss of up to -19% in any single year.

The greater risk that an investor takes will give the potential for greater variation in the investment returns, either positive or negative. The model we use to prepare this analysis is said to have 95% confidence that your returns will fall between the upper and lower band. In other words, it can be thought of as being very unlikely to have performance outside of these parameters in any twelve-month period (though of course it is possible).

Please take the time to review the graphs and then indicate where you would feel most comfortable when comparing the average returns against the possible gains and losses these may produce in a given twelve-month period.

Short Term Investment Period (Up to 9 years)

Data taken from eValue Efficient Portfolio Update, July 2022. Updated on 28^th October 2022

Click to expand Graph

Please study the Short Term Investment Period graph and the average annual returns, which may be achieved at each level of risk along with the corresponding variation for potential positive or negative returns. Please then tick a box below to indicate the profile in which you would feel most comfortable.

Profile 0 - No investment Risk

Profile 1 - Very Cautious

Profile 2 - Cautious

Profile 3 - Low end of Cautious to Moderate

Profile 4 - Cautious to Moderate

Profile 5 - Low end of Moderate

Profile 6 - Moderate

Profile 7 - Low end of Moderate to Adventurous

Profile 8 - Moderate to Adventurous

Profile 9 - Adventurous

Profile 10 - Very Adventurous

Medium Term Investment Period (10 years to 19 years)

Data taken from eValue Efficient Portfolio Update, July 2022. Updated on 28^th October 2022

Click to expand Graph

Please study the Medium Term Investment Period graph and the average annual returns, which may be achieved at each level of risk along with the corresponding variation for potential positive or negative returns. Please then tick a box below to indicate the profile in which you would feel most comfortable.

Profile 0 - No investment Risk

Profile 1 - Very Cautious

Profile 2 - Cautious

Profile 3 - Low end of Cautious to Moderate

Profile 4 - Cautious to Moderate

Profile 5 - Low end of Moderate

Profile 6 - Moderate

Profile 7 - Low end of Moderate to Adventurous

Profile 8 - Moderate to Adventurous

Profile 9 - Adventurous

Profile 10 - Very Adventurous

Long Term Investment Period (20 years or more)

Data taken from eValue Efficient Portfolio Update, July 2022. Updated on 28^th October 2022.

Click to expand Graph

Please study the Long Term Investment Period graph and the average annual returns, which may be achieved at each level of risk along with the corresponding variation for potential positive or negative returns. Please then tick a box below to indicate the profile in which you would feel most comfortable.

Profile 0 - No investment Risk

Profile 1 - Very Cautious

Profile 2 - Cautious

Profile 3 - Low end of Cautious to Moderate

Profile 4 - Cautious to Moderate

Profile 5 - Low end of Moderate

Profile 6 - Moderate

Profile 7 - Low end of Moderate to Adventurous

Profile 8 - Moderate to Adventurous

Profile 9 - Adventurous

Profile 10 - Very Adventurous

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OMW Attitude to Risk Questionnaire