Page 18 - BoAML Plan Handbook 17 V2.0

Your risk profile

You now need to consider how much investment risk you are comfortable taking. The graphics below show some circumstances that might indicate whether you have a
Generally, the more investment risk you are able to take, the greater the potential higher, medium or lower ability to take investment risk. These are broad categorisations
to grow your savings over the longer term. but will get you thinking about how much investment risk you are in a position to take.

Factors that will affect your ability to take
investment risk include: You may have a higher ability to take You may have a medium ability to You may have a lower ability to take

Your age. Generally, the younger you are and the further investment risk if some or all of these take investment risk if some or all of investment risk if some or all of these
you are from retirement, the more investment risk you can points apply these points apply points apply
afford to take. This is because if the value of your Member
Account falls in the short term, you should still have
sufficient time to reconsider your level of contributions
and/or your investment risk profile, or for markets to
recover and offset any loss. Depending on how you plan
to use your savings (see below), the closer you are to Ability to take investment risk Ability to take investment risk Ability to take investment risk
retirement, the more you may want to consider protecting Savings: You have significant savings or income Savings: You have significant savings or income Savings: You are relying on your Member Account
the value of your Member Account and so may find from other sources and expect your Member from other sources but expect your Member as your main source of your total savings when
investments that take less investment risk more suitable. Account to make up only a small part of your Account to make up a reasonable part of your you retire.
The importance of your savings in the Plan. If you total savings when you retire. total savings when you retire. Earnings: You expect your earnings to increase
expect your savings from the Plan to make up only a small Earnings: You are a high earner, or expect your Earnings: You expect your earnings to fluctuate steadily over your career.
part of your retirement income, you may be able to take earnings to rise quickly. (for example, rising quickly when you are younger
more investment risk with how you invest your Member before levelling out, or fluctuating because of the Contributions: You expect to contribute steadily
Account. Conversely, if you expect to rely on your Member Contributions: You expect to make significant nature of your job or because of a career break). to your Member Account and would find it difficult
Account from the Plan for a large part of your total contributions to your savings in the plan or have to top up your Member Account if it falls in value.
savings, you may prefer to take less investment risk. other savings, so could afford to top up your Contributions: You expect to contribute more to Retirement flexibility: You have little or no
Member Account if it falls in value. your savings early on and would find it easier to top
Your earnings and disposable income. If your savings up your Member Account when you are younger. flexibility to delay taking your savings from the Plan
in the Plan fall in value, you need to think about how Retirement flexibility: You have flexibility to and would not be willing to work for longer if your
easy it would be for you to top them up. The more delay taking your savings from the Plan or would Retirement flexibility: You have some flexibility Member Account falls in value as you approach your
disposable income you have, the easier it should be be willing to work for a little longer if your to delay taking your savings from the Plan and Target Retirement Date.
to make up any shortfalls. Member Account falls in value as you approach would be able to work for a little longer if your
your Target Retirement Date. Member Account falls in value as you approach
Your contributions. How much you can afford to your Target Retirement Date.
contribute to the Plan is important. Just as important
is when you are able to contribute, as the longer your
contributions are invested, the more you should benefit Attitude to investment risk Attitude to investment risk Attitude to investment risk
from investment growth and potential interest.
You are a risk-taker by nature; you are You are willing to take some investment risk You are cautious by nature and are willing
How much flexibility you have about when you use comfortable investing in funds that take the with your money but prefer to spread this risk. to trade the potential for higher growth
your savings. The more flexibility you have about when most investment risk and are prepared for You accept this could mean losing out on the in return for much more stability.
you receive your savings, the more investment risk you your savings to go up and down in value, potential for higher growth, but you are willing
may be able to take. This is because if your Member sometimes quite sharply. You accept this to trade this in return for more stability.
Account falls in value, you might be able to work for could mean losing out, but it could also
longer or delay receiving your savings, hopefully giving mean achieving higher potential growth.
your investments time to recover.

Your attitude to investment risk. Your attitude to Not sure where to start?
taking investment risk will also influence your decision,
although the type and level of risk you are comfortable Use the online investment profiler at
taking may not be the same as the risk you are able to www.baml.com/investmentprofiler.
take; you may have to rein in your adventurous spirit, Answer eight short questions. The results will give
or step outside of your comfort zone to try and achieve you an indication of your attitude to risk and control.
the results you want. This will help you consider an investment option that
may be right for you.

18 19