Risk Profile Analysis

Investment risk profiles
1 January 2020 (updated annually)
Exposure to risk is a central element of investment decisions. Knowing this,

the next step is to work out your personal attitude to risk.
Investment risk profiles – which one are you?

By answering a series of questions about goals, time frames and attitudes during the fact finding
process, you and your financial adviser will be able to determine your risk profile – which will help you
make the right investment choices for your situation.
Asset allocation – getting it right

When it comes to deciding what to invest in, it all comes down to getting the right mix of assets. This
varies from person to person and will usually be determined by your risk profile, your goals and
personal circumstances. We have established six investment risk profiles; the key characteristics and
the investment analysis for each of the risk profiles are detailed in the tables below:
Type A investor – conservative
Investment objective
You seek to protect your capital and are somewhat concerned when this does not occur.
You have a very basic understanding of the investment markets and their operations.
When you think of the term risk, you think it means 'danger'.
When you make a financial decision, you usually focus on the possible losses.
You seek moderate returns and do not wish to take on more than a low level of risk.
With your present investment monies, you would be comfortable taking very low risks and you are
not very comfortable with the concept of risk.
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Investment strategy and timeframe
Historically, the probability of a negative return in any one year is 4%.

Recommended investment timeframe is from 3 to 5 years.
Investment returns over the long-term aim to be better than the CPI.
This investment portfolio is made up of around 85% defensive assets and 15% growth assets.
Type B investor – moderately conservative
You are prepared to establish a diversified portfolio to partially protect you from inflation and tax.
You have a general understanding of the investment markets, but would like to have a broader
understanding in order to explore the possibilities.
When you think of the term risk, you think it means 'uncertainty'.
When you make a financial decision, you are more focused on the possible losses, but also keep in
the mind the possible gains.
You are prepared to accept a moderate level of risk (and therefore volatility) in the overall capital
value of your investments.
You are generally a low risk taker and are somewhat comfortable with the concept of risk.

Investment returns over the long-term aim to be CPI plus 2-3% pa.
Type C investor – balanced
You wish to adopt a diversified portfolio to somewhat protect you from inflation and tax.
You have a reasonable understanding of the investment markets and their operation.
When you think of the term risk, you think it means 'possibilities'.
When you make a financial decision, you are more focussed on the possible gains, but also keep in
mind the possible losses.
You can accept that there will be some level of volatility in the value of your investments.
You are a moderate risk taker and can accept some moderate levels of investment risk.
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Type D investor – moderate growth
You want to invest in a broad spread of quality investments, but predominantly in growth assets to
achieve higher growth.
You understand that investment markets can and will fluctuate and that different market sectors offer
different levels of risks, income and growth.
Your investment time horizon is for the long-term, 7 years or more.
When you think of the term risk, you think it means 'opportunity'.
When you make a financial decision, you usually focus on the possible gains.
You are a high risk taker and can accept higher levels of investment risks.
You are seeking to achieve a reasonably high rate of growth on the capital invested.

Recommended investment timeframe is 7 years plus.
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Type E investor – growth
You are interested in capital growth and accumulating wealth more quickly relative to your
investment timeframe.
You understand the cyclical nature of investments and accept that there will be a very high level of
volatility in the value of your investments.
You are experienced in all major investment markets and have a very good understanding of the
investment markets. You are aware of the factors that may affect investment performance in
investment markets.
When you think of the term risk, you think it means 'thrill'.
When you make a financial decision, you always focus on the possible gains.
You can accept very high levels of variability in investment returns, as you understand that the higher
the risks associated with investments, potentially the higher level of returns expected.

Historically, probability of a negative return in any one year is 25%.
Investment returns over the long-term aim to be CPI plus 5% or more pa.
Type F investor – shares

You are interested in capital growth and accumulating wealth more quickly relative to your
investment timeframe.
You understand the cyclical nature of investments and accept that there will be a very high level of
volatility in the value of your investments.
You are experienced in all major investment markets and have a very good understanding of the
investment markets. You are aware of the factors that may affect investment performance in
investment markets.
When you think of the term risk, you think it means 'thrill'.
When you make a financial decision, you always focus on the possible gains.
You can accept very high levels of variability in investment returns, as you understand that the higher
the risks associated with investments, potentially the higher level of returns expected.
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Historically, probability of a negative return in any one year is 25%.

Investment returns over the long-term aim to be CPI plus 5% or more pa.
Ask your Bridges financial planner for more information.
Bridges Financial Services Pty Ltd (Bridges) | ABN 60 003 474 977 | ASX Participant | AFSL 240837 | Part of the IOOF group
This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making
any decision based on this document, you should assess your own circumstances or seek advice from a financial planner and
seek tax advice from a registered tax agent. Please obtain and consider the PDS before making any decision about whether
to acquire a financial product. Information is current at the date of issue and may change.
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Investment risk profiles

1 January 2020 (updated annually)

Exposure to risk is a central element of investment decisions. Knowing this,

Investment risk profiles – which one are you?

Asset allocation – getting it right

Type A investor – conservative

Historically, the probability of a negative return in any one year is 4%.

Type B investor – moderately conservative

Investment strategy and timeframe

Historically, the probability of a negative return in any one year is 17%.

Type C investor – balanced

Historically, the probability of a negative return in any one year is 22%.

Type D investor – moderate growth

Investment strategy and timeframe

Historically, the probability of a negative return in any one year is 25%.

Investment strategy and timeframe

Type F investor – shares

Historically, probability of a negative return in any one year is 25%.

Ask your Bridges financial planner for more information.

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