Investment Philosophy

• Assessing risk and reward required - We have detailed discussions with our clients to under- stand their goals, current and anticipated income and expenses, and current and anticipated assets and liabilities. We help our clients establish the return needed to meet their future objectives and in turn agree the most appropriate investment solutions. • Capacity for loss - Capacity for loss is the second key element of our clients’ overall appetite towards bearing capital risk and reward. When undertaking the assessment of our clients’ financial position, we discuss the effect the loss of any capital invested in relation to the stand- ard of living and/or future objectives. • Risk and reward tolerance - Unlike risk and reward required and capacity for loss, which are financial calculations, tolerance is psychological. Through discussion we assess risk and re- ward tolerance and any inconsistencies are highlighted and discussed. When making an investment and during the time it is held, we need to help our clients take account of the risks, rewards and consequences. Risk and reward profiling is the process for determining an appropriate investment strategy. It has three primary aspects which we take into account in making our recommendations. ATTITUDE TO RISK AND REWARD AND CAPACITY FOR LOSS It is important that when making decisions in relation to financial planning that our clients are aware of and fully understand the potential risk and rewards involved. For example: • Capital risk - not getting back as much as originally invested / losing some of the return already achieved. • Income risk - the risk and reward that the income level achieved is less than expected. • Liquidity risk - not being able to access money when needed. • Inflationary risk - also called purchasing power risk, is the chance that the cash flows from an investment may not be worth as much in the future because of changes in purchasing power due to inflation. YOUR CAPACITY TO TAKE RISK YOUR ATTITUDE TO RISK YOUR NEED TO TAKE RISK YOUR INVESTMENT OBJECTIVE INDEPENDENT FINANCIAL ADVISERS