14. Advice

Question 1

What are the 4 approaches to establishing a client’s attitude to risk?

Answer 1

Interview; subjective & reliant on quality of questions and client’s understanding

Menu; describing risk levels & ask client where they fit

Pychometric; what if…

Portfolio; show range of hypothetical portfolios - client’s choice indicates attitude to risk

Question 2

What does ESG stand for

Answer 2

Environmental, Social, Governance

Question 3

What is positive and negative screening?

Answer 3

Positive; including companies in fund/portfolio based on certain criteria

Negative; excluding companies

Question 4

What is the role of Vigeo Eiris?

Answer 4

Researches/screens companies worldwide

Question 5

In what 4 ways can investors carry out “Engagement”

Answer 5

Positive/negative screening
Voting power of shareholdings
Discussions with management
Publicity

Question 6

What is the difference between direct and indirect investment?

Answer 6

Direct; individual stocks/bonds

Indirect; funds/trackers