Risk Profile Questionnaire

Investment is a challenging topic. Most firms have Risk Tolerance Questionnaires that are designed to get you invested into their products. Armis Financial is a “fee-only” firm that doesn’t get paid by how much or what we sell. We only get paid for professional advice.

The Armis Financial Risk Profile Questionnaire is designed to help you gauge the two most important investment principles: Self and Risk Awareness. The Questionnaire has 10 questions, divided into two sections: Understanding your Risk Capacity and Understanding your own Tolerance to Risk.

After assessing these two elements, we will evaluate the results and determine your true Risk Profile. This will help us get a better understanding of your financial goals and build a personalized investment plan.

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Risk Capacity - Time Horizon

1. What is your current age?

More than 60
Between 51 and 60
Between 41 and 50
Between 31 and 40
30 or Younger

Risk Capacity - Time Horizon

2. Please estimate when you will need to withdraw 20% of your current portfolio value, such as a need for a house down payment or some other major financial need?

Within the next year
2 – 5 Years from now
5 – 10 Years from now
10 – 20 Years from now
More than 20 Years from now

Risk Capacity - Liquidity

3. If you were to lose your job today, how long will you be able to maintain your current spending life style before you run out of money in your Savings and Checking account?

1 Week
1 Month
3 Months
6 Months or More
I'm Retired

Risk Capacity - Income

4. What is your total annual income? ( Work, Pension, Social Security, etc.)

Less than $50,000
$50,000 – $100,000
$100,000 – $150,000
$150,000 – $250,000
More than $250,000

Risk Capacity - Reliability

5. Please rate the stability of your income.

Very Low
Below Average
Average
Above Average
Very High

Risk Tolerance - Behavior

6. If you unexpectedly received $20,000 to invest today, what would you do?

Deposit it in a bank account, money market account, or an insured CD.
Invest only in safe quality bonds or bond funds.
Invest in a proper mix of bonds and stocks
Invest only in stocks or stock funds
Buy $20,000 worth of lottery tickets.

Risk Tolerance - Perception

7. When you think of the word “risk” in a financial context, which of the following words come to mind?

Absolute Loss
Danger
Uncertainty
Opportunity
Thrill

Risk Tolerance - Short-Term

8. Which of these statements would best describe your attitudes about the next three years performance of this investment?

I need to see at least a little return
I’d have a hard time tolerating any losses
I can tolerate a small loss
I can tolerate a loss
I don’t mind a loss

Risk Tolerance - Volatility

9. Throughout the 17-month bear during the 2008 Mortgage Crisis, the S&P 500 lost 50% of its value. Which of the following would you have done if your portfolio experiences a 50% loss?

Sell all of your remaining investments and remain in cash
Move all of your investments into Bonds and CDs
Change the allocation of your portfolio to something more conservative
Hold on to your investment
Invest more

Risk Capacity - Volatility

10. How emotionally comfortable are you with volatility?

Which the following portfolios are you more comfortable with given the best-case and worst-case annual return?

The figures are hypothetical and do not represent the performance of any particular investment.

Plan	Best-case	Worst-case	Average Annual Return
A	16.1%	-5.4%	7.0%
B	24.8%	-11.9%	8.8%
C	33.4%	-18.0%	10.2%
D	42.6%	-23.8%	11.5%
E	50.0%	-28.2%	12.3%

Portfolio A
Portfolio B
Portfolio C
Portfolio D
Portfolio E

Calculating your score:

Your Risk Capacity:

Time Horizon

Q1.

A = 0

B = 3

C = 5

D = 8

E = 10

Q2.

A = 0

B = 3

C = 5

D = 8

E = 10

Liquidity

Q3.

A = 0

B = 3

C = 8

D = 10

E = 5

Income

Q4.

A = 0

B = 3

C = 5

D = 8

E = 10

Reliability

Q5.

A = 0

B = 3

C = 5

D = 8

E = 10

Risk Capacity Score:

Your Risk Tolerance:

Behavior

Q6.

A = 0

B = 3

C = 5

D = 8

E = 10

Perception

Q7.

A = 0

B = 3

C = 5

D = 8

E = 10

Short-Term

Q8.

A = 0

B = 3

C = 5

D = 8

E = 10

Volatility

Q9.

A = 0

B = 3

C = 5

D = 8

E = 10

Q10.

A = 0

B = 3

C = 5

D = 8

E = 10

Risk Tolerance Score:

Determining Your Risk Profile

Now it’s time to determine your Risk Profile. This table will guide us to determine what is your proper Risk Profile by cross-referencing your Risk Capacity Score and your Risk Tolerance Score. Keep in mind that this won’t be the ultimate deciding factor on how we will invest. Every individual has different goals for the account that will be opened. There are many factors that come into play that may cause a slight change to your Risk Profile, such as the Risk Required to meet your financial goals. However, the table below will be the starting point to tailoring an investment strategy to meet your goals.

Total Risk Profile Score:

0 - 20	21 - 40	41 - 60	61 - 80	81 - 100
Very Conservative	Conservative	Moderate	Moderately Aggressive	Very Aggressive

Your Risk Profile

Your Risk Capacity

Your Risk Tolerance

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