Appendix A
Personal Financial Planning Questionnaire
Please complete the following information as completely and accurately as you can.
Personal Information
Client
Name Address
Spouse
Home/cell phone numbers Prior residences (by state) Birthplace Birth date Current age Social Security number Occupation Employer Length of current employment (years) Business phone number Current marital status Prior marriages (yes/no)
Family Members Who Depend on Your Support
Please list any family members or individuals that you wish to plan for.
Child/Grandchild
Birth date
Birthplace
Social Security number
Other Individuals/ Dependents
Birth date
Birthplace
Social Security number
Family Health Issues
Do any family members/dependents have significant health problems? If so, please explain.
Family Member
Health Issue(s)
Family Advisors and Representatives
Name
Attorney Banker Doctor Executor(s) Financial planner Guardian(s) Insurance agent Investment advisor Minister/Rabbi Tax preparer Other: Other:
Phone Number
Family Goals
Please list all of your financial planning goals and a timeframe for when you wish to begin implementing them.
Family Goals
Sense of urgency
(immediate, within 3 to 12 months, or 1 year or later)
Client’s Individual Goals
Spouse’s Individual Goals
Family Objectives
Please indicate which of the following objectives are important for your family.
Objective
Important to the Client (yes/no)?
Important to the Spouse (yes/no)?
Saving for education (yourself, children, grandchildren, etc.) Saving for retirement Being able to retire early (age 55 or earlier) Minimizing income taxes Minimizing estate taxes Providing support for an aging parent/relative Improving investment returns Improving insurance coverage Supporting a favorite charity Planning for your estate Improving your standard of living Changing or improving your employment situation Other: Other:
Taxable Assets
Please list the current value for each of the following and provide the latest account statement available.
Account/Investment
Cash on hand Checking account CDs Money market Savings account Life insurance cash surrender value Stocks:
Client
Spouse
Joint
Bonds:
Mutual funds:
Closely held business interest Limited partnership interest Other: Other:
Retirement Accounts
Please list the current value for each of the following and provide the latest account statement available.
Account
IRAs:
Client
Spouse
401(k)/403(b):
Pension plan
Profit-sharing plan
Stock options:
Deferred compensation Other:
Real Estate
Please list the current value for each of the following.
Type
Ownership
(client, spouse, or joint)
Cost
(in dollars)
Market Value
(in dollars)
Loan Balance
(in dollars)
Monthly Payment
(in dollars)
Primary residence Vacation home Rental property Other: Other:
Personal Property
Please list the current value for each of the following.
Ownership Type
Aircraft: Art and antiques: (client, spouse or joint)
Market Value
(in dollars)
Loan Balance
(in dollars)
Automobile: Automobile: Automobile Boat: Collectibles Fur(s) Household goods Jewelry Other:
Other:
Liabilities
Please list the current balance for each of the following.
Type
Alimony/child support Bank loans: Charitable pledge Credit cards:
Ownership
(client, spouse, or joint)
Balance Due
Home equity loan or line of credit: Installment loan Insurance policy loan: Investment debt (margin) Personal loan Retirement plan loan: Student loans: Other: Other:
Credit Ratings
What is your current credit rating or score? When was the last time you pulled a copy of your credit report? Have you ever filed for bankruptcy? What is the date when you last prepared a family balance sheet?
Income
Please list the following sources of income in annual amounts.
Type
Client
Spouse
Joint
Employment Income
Annual salary Bonus Commissions Self-employment income Other:
Investment Income
Dividends Interest—taxable Interest—tax-free Rental income (net) Annuities Other:
Miscellaneous Income
Alimony Trusts Child support Estates Gifts Retirement accounts Sale of property/ investments Social Security payments Other: Other: Do you expect a significant change in income over the next two or three years? (if so, estimate amounts)
Expenditures
Please list the following current estimated expenditures in annual amounts.
Type
Charitable contributions Clothing Education Employment-related Food Gifts Home improvement/repair/maintenance Income and other payroll taxes Insurance: Auto Homeowners Disability income Life Medical Long-term care Personal liability Other: Medical expenses (unreimbursed) Mortgage/rent Personal expenses Recreation: Dining out Vacations Other Savings Taxes: FICA Income Property Telephone Transportation: Auto fuel/repairs/maintenance Auto payments Utilities Other:
Amount
What is the date when you last prepared a family budget?
Insurance Coverage
Please list the following types of coverage.
Type
Amount
Owner
Life
Insured
Beneficiary
Group term Term Universal life Whole life
Disability
Short term Long term
Medical
Health care Long-term care
Liability
Umbrella Professional
Property
Auto Homeowners Are you or your spouse engaged in any professional activities, paid or unpaid, outside of your main employment (e.g., moonlighting, board memberships, volunteer work, professional association memberships, etc.)? If so, please explain.
Client or Spouse
Professional Activity
Retirement Planning
Question
At what age do you plan to retire? Where will you retire? Have you made an estimate of income needed for retirement? (If so, list estimated annual amount in today’s dollars.) Are you eligible for Social Security? (If so, list estimated annual amount.) What savings, if any, have you already made for retirement expenses? What savings vehicles are available to you through your employer? Are you taking maximum advantage of your employer’s savings plans? How many years do you anticipate living in retirement? What do you expect the inflation rate to be during your retirement? What rate of return do you expect to earn on your investments during retirement? What preparations, if any, have you made for long-term healthcare needs? Do you expect to receive any inheritances? Please describe your plans and dreams for retirement.
Client
Spouse
Estate Planning
Document
Do you have a current will? Do you have a letter of instruction to assist your executor(trix) in administering your estate? Have you discussed your inheritance plan with your adult children and other potential heirs? Do you have a guardian for your children? Do you have a living will? Do you have a healthcare power of attorney? Do you have any trusts established? Do you wish to make charitable bequests at your death? Have you made known (or communicated) to others your preferences for funeral arrangements? Please describe the details of any trusts affecting you or your family.
Client
Spouse
Trust Name
Owner
Beneficiary
Purpose
Education Planning
Question
Do you intend to send your children to college? Will this be a public or private institution or some combination? Have you completed an education cost needs analysis? Have you made an estimated Expected Family Contribution calculation? Do you anticipate the need for financial aid? What savings, if any, have you already made for college expenses? Is borrowing for college (student loans) an acceptable option? Do you expect your children to pay for part or all of their college educations?
Response
Tax Planning
Question
Who prepares your tax returns? What is your marginal federal tax bracket? Do you have adequate documentation to support your returns in the event of an audit? Do you expect to be in a higher or lower tax bracket in retirement? Do you normally receive a federal tax refund each year? Are you taking advantage of all of the tax benefits available through your employer (cafeteria plan, retirement plan, etc.)? Please attach a copy of your last two years’ tax returns.
Response
Investment/Risk Tolerance Questionnaire
1. (a) What is the approximate value of your investment portfolio $___________ (b) What percentage of your total investments is represented by this portfolio? ___% 2. (a) Is there an immediate or near term (i.e., within 5 years) need for income from this portfolio? Yes___ No___ (b) If yes, when will the income be needed? _______years 3. Will significant cash withdrawals of principal and/or contributions be made from this portfolio over the next 5 years? Yes___ No___ 4. (a) Is this a taxable or partially taxable portfolio? Yes___ No___ (b) If yes, what income tax rate should be used for planning purposes? _________% 5. What is your portfolio’s investment time horizon? Note: Investment time horizon refers to the number of years you expect the portfolio to be invested before you must dip into principal. Alternatively, how long will the objectives stated for this portfolio continue without substantial modification? Please mark your choice. Three Years ______ Five Years ______ Ten Years ______ Over Ten Years ______ If you have indicated less than ten years, please explain when the funds will be needed: ______________________________ 6. My (our) goal for this portfolio is an annual return of : This is based on an expected inflation rate of: __________% __________%
7. For each of the following attributes, circle the number that most correctly reflects your level of concern. The more important, the higher the number. You may use each number more than once.
MOST Capital preservation Growth Low Volatility Inflation Protection Current Cash Flow Aggressive Growth LEAST 6 6 6 6 6 6 5 5 5 5 5 5 4 4 4 4 4 4 3 3 3 3 3 3 2 2 2 2 2 2 1 1 1 1 1 1
8. ASSET CLASS CONSTRAINTS ASSET CLASSES Provide Any Asset Class Limitations (OPTIONAL) Minimum Maximum T-bills, CDs, money market Intermediate government bonds Intermediate corporate bonds Intermediate municipal bonds Long term government bonds Long term corporate bonds Long term municipal bonds Foreign bonds Domestic equities, S&P 500 Domestic equities, OTC Foreign equities Real estate Precious metals
9. What percent of your investments are you likely to need within 5 years? _______% 10. Up to what percentage of this portfolio can be invested in long term investments (i.e., over 5 years)? ________% 11. Investment “risk” means different things to different people. Please rank the following statements from 1 (the statement that would worry you the most) to 4 (the statement that would worry you the least).
I would be very concerned if I did not achieve the return on my portfolio that I expected, i.e., my target rate of return. 1__ 4__ I would be very concerned if my portfolio was worth less in “real” dollars because of inflation erosion. 1__ 4__ I would be very concerned with short term volatility, i.e., if my portfolio dropped substantially in value over one year. 1__ 4__ I would be very concerned with long term volatility, i.e., if my portfolio dropped in value over a long period of time (i.e., five years and longer). 1__ 4__
2__
3__
2__
3__
2__
3__
2__
3__
12. Except for the “great depression”, the longest time investors have had to wait after a market “crash” or a really bad market decline, for their portfolio to return to its earlier value has been: 4 years for stock & 2 years for bond investments. Knowing this, and that it is impossible to protect yourself from an occasional loss, answer the following question: If my portfolio produces a long term return that allows me to accomplish my goals, I am prepared to live with a time of recovery of........... Less than one year ____ Between one and two years ____ Between two and three years ____ Over three years ____ If you selected less than “between two and three years”, are you prepared to substantially reduce your goals? Yes___ No___ 13. Please check the statement that reflects your preference. I would rather be out of the stock market when it goes down than in the market when it goes up (i.e., I cannot live with the volatility of the stock market). _______ I would rather be in the stock market when it goes down than out of the
market when it goes up (i.e., I may not like the idea, but I can live with the volatility of the stock market in order to earn market returns). _______
14. Several portfolio performance projections are listed below. Assuming that inflation
averages 3 1/2%, check the portfolio that most nearly reflects your goal for your portfolio. Overall Risk Level Expected Compounded Return (Inflation = 3 1/2%) 6.5% 7.5% 7.7% 8.0% 8.3% 8.5% 9.0% 9.5% Expected Annual Range of Returns* -2.0% to 13.0% -3.0% to 16.0% -4.0% to 19.0% -4.5% to 20.0% -5.0% to 21.0% -6.0% to 22.0% -7.0% to 24.0% -8.0% to 25.0% “Worst Case”** CHECK
Low/Low Mod/Low Mod/Low Mod/Low Mod/Mod High/Mod High/Mod High/Mod
-4.0% -9.0% -10.0% -11.0% -13.0% -14.0% -20.0% -24.0%
* These estimates are based on a statistical measure of one standard deviation. This means that based on the assumptions used in developing these projections, the portfolio returns will fall within these ranges two out of every three years. ** We use the term “worst case” to describe the worst annual return that a portfolio is likely to experience 90% of the time.
15. Please answer either (a) or (b) to the following two questions. Question #1. (Choose (a) or (b)) (a) You win $80,000 ______ (b) You have an 80% chance of winning $100,000 (or a 20% chance of winning nothing) ______ Question #2. (Choose (a) or (b)) (a) You lose $80,000 (b) You have an 80% chance of losing $100,000 (or a 20% chance of losing nothing)
______ ______
16. Do you consider yourself a risk taker or a risk avoider? Please explain: Client________________________________________________ Spouse_______________________________________________ 17. On a scale of 1 to 10 (with 10 being an ability to accept a high degree of risk), how would you rate your risk tolerance level? Client________________________________________________ Spouse_______________________________________________ 18. Do you have certain investments you would or would not want to sell or reposition due to past performance, personal preference, social issues, or any other reasons? If so, what are they? Client________________________________________________ Spouse_______________________________________________ 19. Which investments have been most financially rewarding? Client________________________________________________ Spouse_______________________________________________ 20. Which investments have been most disappointing? Client________________________________________________ Spouse_______________________________________________ 21. How active would you like to be in the management of your investments? Client________________________________________________ Spouse_______________________________________________
Document Storage
Please identify the location for the following documents, if applicable to your situation.
Document
Bank statements Birth certificates and passports Business documents Credit card statements Employee benefit handbooks Household budget Insurance policies Inventory of household furnishings and possessions Inventory of wallet/purse contents Investment statements Loan documents Marriage license Personal financial statements Property titles Retirement plan statements Tax returns Trust documents Wills Other: Other:
Location
Accuracy of Information You Provided
How would you characterize the quality of the information you provided? Very accurate Based on estimates that are reasonably accurate Based on rough estimates Comments: __________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________