Kuala Lumpur, Malaysia

CIFP part 1

TK 1003 Wealth Planning and Management

A Comprehensive Wealth / Financial Plan

Name: Siti Fariza bt Abdul Hamid

Matric No: 1000361

Instructor: Mr. Mohd Tarmizi bin Ahmad Nordin

September 2010

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Prepared for: Mr. Sulaiman bin Ali and Mrs. Suhaila bt Ahmad

Prepared by: Siti Fariza bt Abdul Hamid (Financial Advisor)

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TABLE OF CONTENT

1.0 Introduction 4

2.0 Customer Profile 4

3.0 Goals and Objectives 5

4.0 Current Situation 6

5.0 Comprehensive Financial Plan 10

7.0 Conclusion 14

8.0 Appendices 15

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 1.0 Introduction

Financial or Wealth Planning is very important for every person especially for people who
already started working and has family. This is because, it will help the individual to plan
their future financial and to be prepared for unexpected expenses or risks in the future.

This financial planning does not made or modified only for certain group of income level but
it is for everybody. It can help people in managing debt, having enough liquidity or cash,
organizing the savings and expenses, having good investment return, planning good
retirement, taking insurance or takaful for unexpected risks and most importantly is help to
cope with major life changes such as marriage, divorce, birth of a child, changing jobs, or
retirement so that people can make decision wisely in their future plan.

To develop a good financial plan that will contribute to the successful of the financial in the
future is to get started. By getting started, the real situation of the financial can be known.
Based on the real situation, the financial planner can come out with the financial plan and
how to manage it. The current financial condition includes how much money have been
saved, the value of investments and what types of investment have been investing, the risk
appetite and others. It will help the financial planner to plan and to consult direct to the
customer towards achieving their financial goals. For example, what products should be
investing in, for how long, how much should be saved, where should invest and much more.

Therefore, a successful personal financial planning is extremely important for anyone who
wishes to stay ahead of their finances. So, in this financial report is focus on Mr. Sulaiman's
wealth planning.

2.0 Customer profile

General Information

Mr. Sulaiman bin Ali, 35, is a Branch Manager at Melawati Branch, Bank Muamalat
Malaysia Berhad (BMMB) with 12 years working experience. He is married with Mrs.
Suhaila bt Ahmad, 32, works as a Senior Executive at Maybank Setiawangsa Branch with 8
years working experience. They have 2 children. Their first son is Syamsul, 7 years old and
their daughter is Suraya, 5 years old. Mr. Sulaiman earns a total of RM 120, 000 annually
(including tax and EPF) and his wife earns a total of RM 78, 000 (including tax and EPF)

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annually. So, the total gross household income per year for Mr. Sulaiman's family is RM
198, 000.

Mr Sulaiman already bought a condominium house at Mount Kiara and expected to be

completed in 2011 and they’re planning to move into it for own use. Currently, they rented a double
storey terrace house about RM 1700 per month at Taman Melawati.

Risk Profile

Based on the risk profile questionnaire, Mr. Sulaiman has a Defensive Investment Strategy,
which indicates that he just can accept the risks that remain within the reasonable limit. He is
only investing to a portfolio of investment options designed to minimize the risk of losing his
principal such as bonds, currency, very safe stocks and precious metals.

3.0 Goals and Objectives

Financial goal can be for a short and long term. The financial goal can be in form of savings
for retirement, savings for assets, investment, savings for children’s education, buying
property or real estate, etc. The financial plan will be set up based on the financial goal and
the plan should be followed in order to get the desired result in the future.

As for Mr. Sulaiman, based on his customer profile, there are several goals and objectives
which are:

1. Education planning

Mr Sulaiman wants to save for his children education especially for their higher
education cost. He wants to send his son to the University of Auckland, New Zealand
and taking Biochemical Engineering course while for his daughter, he wants to send
to the University of Melbourne, Australia taking Accounting course. This is because,
he wants the best for his children so that they can live in a better life in future. So,
he already started to save from now to ensure that his children can further study at the
best universities.

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2. Retirement planning

To have a good retirement plans where he can have a comfortable living after he gets
retired, he already investing in Employee Provident Fund (EPF). Even though it is
compulsory for all private sector companies to save part of their salary in EPF, this is
one of the good opportunities to Mr. Sulaiman to ensure that he has saving for
himself and his family after retirement. He targeted to get as much as possible that the
rate is 5% from employee and 11% from employer. At the end of maturity, which is
55 years old, he aimed to get at least RM1, 000, 000 or he needs 75% of current value
of his income so that he can cover all the expenses.

3. Takaful planning

Mr Sulaiman takes Family Takaful. He takes the plan which can cover the education
for his children, future income for his family and bear the debt in case if he dies. This
takaful plan is for the security purposes in case if he dies early because we cannot
determine when our death. The Takaful also should cover to pay his medical bills and
helps his family member to survive if anything happens to him such as accident or
death. He thinks that if he has takaful plan, this is one of the good investment because
this takaful is differ with insurance. Takaful has two accounts which are Participant
Account (PA) and Participant Special Account (PSA). For Participant account is like
investment account which is saving for him, so that whatever he invests, he will get
the principal plus profit at maturity and he thinks to take the takaful until the age of
55 years old. So, he will get the money in case if he still alive. On the other hand,
PSA is a donation (tabarru') account. This is pool account from other participants to
cover if there are death, medical expenses, accident or others. So, this fund is not for
participant individually, but to help others.

4. Estate planning

Mr Sulaiman already makes a will (wasiat) for the distribution of his wealth
according to faraid.

4.0 Current situation

1. Assets and Liabilities

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 Asset Client (RM) Spouse(RM) Liability Client(RM)
Cash & Cash 28,000 12,000 Long Term 481,335
equivalence Liabilities
Investment Assets 96,500 50,320
Personal-Use Assets 627,000 44,000
Total Assets 751,500 106,320 Total Liabilities 481,335

Assets and Liabilities are the wealth that Mr Sulaiman has. These assets can be part of his wealth that
can be used for his family income in future.

2. Net Worth Analysis

Client (RM) Spouse (RM) Total

Total Asset 751,500 106,320 857,820
Total Liabilities 481,335 - 481,335
Net Worth 270, 165 106,320 376,485

The Net worth Analysis indicates the creditworthiness. The amount of Assets should be more than
Liabilities. From his Net Worth, it shows that he has an enough assets which are RM 376, 485.

3. Cash Flow Analysis

Income 149,015 Outflow 133,777

Total Inflow 15,238

The Cash flow analysis indicates that cash inflow and outflow. It should be positive because the
income must be more than expenses. For Mr Sulaiman, he has positive cash flow which is RM 15,
238.

4. Financial Ratio

Personal financial statement ratio analysis is a guide to evaluate the financial position of an individual
based on the financial formulas. It is important to know the financial health prior to start developing
life plans. By doing a thorough financial statement ratio analysis, people can have a clear idea of
whether to carry on with their planning or not.

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 Basic liquidity ratio:
Cash and Cash Equivalent 40,000 3.50
Monthly Expenses 11,418

Basic Liquidity Ratio can be derived by using cash and cash equivalents divided by monthly
expenses. From the above calculation, it shows that Mr. Sulaiman has about 3 to 4 months of
his cash to cover the expenses of his family if something happen to his life such as death. If
he wants a healthy liquidity position, he needs to achieve the ratio of between 3 to 6 months.
According to the above situation, it is actually already suitable for him but he can top up his
cash or cash equivalent and reduce expenses so that he can cover the expenses more than 4
months.

Standby liquidity ratio:

Liquid investment asset 20,000 1.75
Monthly Expenses 11,418

Standby Liquidity Ratio shows how many months can Mr. Sulaiman support his living
expenses when he are trapped in a serious financial crisis such as bankruptcy until all his
cash or cash equivalents are fully used up. In this critical situation, he may have to convert
some of his investment assets which are more liquid into cash. Liquid investment assets
include mutual fund, managed funds, fixed income securities and quoted shares. He should
increase his investment in bonds or invest in other types of investment such as mutual fund
that can be taken from his monthly salary and try to reduce his expenses.

Savings ratio:
Net cash surplus 15,238 10.4%
Annual Net Income 146,520

Savings Ratio is the percentage of how much have he put aside every month with the purpose
of future consumption. According to the above situation, his saving ratio is 10.4% which is
enough for him because the standard for this ratio is 10% but he can also reduce his expenses
so that he can use his saving if emergency.

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 Liquid asset to net worth ratio:
Cash and Near Cash 40,000 10.6%
Net Worth 376,485

Liquid Assets to Net worth Ratio is the percentage of cash or cash equivalents in the net
worth. According to the calculation, he only reaches 10.6% which is not enough for him. The
recommended level of this ratio is higher than 15%. The higher means the more liquid is the
net worth. So, he must take part of his investment assets that can be turned into cash or cash
equivalents such as sell his car and put the money into current account.

Debt-to-Asset ratio:
Total Debt 481,335 56.1%
Total Assets 857,820

Debt to Asset Ratio provides information of the ability to pay debts with the available assets.
As all liabilities must eventually be settled, this is a broader measure of the liquidity position,
and provides a view of solvency. From the above situation, his debts are more than half of
his total assets. He should decrease his total debts by selling his property such as jewelry so
that he can reduce his debt. The ratio should be 50% or lower to make sure he is in a healthy
debts payment position.

Debt service ratio:

Total Annual Loan Repayment 48,459 33.1%
Total Take Home Income 146,520

Debt Service Ratio shows the percentage of the monthly payment to service debts compare to

the take home income. From the above calculation, it shows that 33.1% is enough because

the benchmark is 35% or lower.

Non-mortgage debt service ratio:

Total Annual Non-Mortgage Loan Repayment 18,120 12.4%
Total Take Home Income 146,520

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Non-Mortgage Debt Service Ratio compares the annual payments to service all debt
(excluding mortgages) with your take home income. It provides insight into the amount of
after-tax income that the client uses to service non-mortgage debts. According to the above
matter, it shows that 12.4% is enough because a healthy ratio would be 15% or lower.

Net investment assets to net worth ratio:

Total Invested Assets 146,820 39.0%
Net Worth 376,485

Net Investment Assets to Net worth Ratio compares the value of investment assets with net
worth. It shows that 39% is not enough because the benchmark is 50% and above and it
should be increased as retirement approaches. One thing that Mr. Sulaiman can do is increase
his investment so that he can get more profit at the age of retirement.

5.0 Comprehensive Financial Plan

1. Education planning

Mr. Sulaiman has 2 children with age between 5 to 7 years old. He needs to plan for his
children education when they want to enter the higher learning education institution later.
Mr. Sulaiman's son is 7 years old who already in Standard 1. His son will enter the university
in 12 years time with an estimated annual education cost (current) of RM 80,000. After
incorporating the inflation rate (3%) and the estimated rate of return on the investment (6%),
the future value of estimated annual education costs for Mr. Sulaiman's son is RM 114,061.
He targeted his son to take 4 years course and total estimated education fund required is RM
437,238.

In addition, Mr. Sulaiman's daughter is 5 years old. She will enter the university in 14 years
time with an estimated annual education cost of RM 90,000. After incorporating the inflation
rate (3%) and the estimated rate of return on the investment (6%), the estimated fund
required annually for Mr. Sulaiman's daughter is RM 136,133. He also targeted his daughter
to take 4 years course and total estimated education fund required to accomplish her study is
RM 521,848.

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In total, Mr. Sulaiman needs to have RM 448,108 for the present value of estimated
education fund required for both his children higher learning education cost. In order to
obtain this amount of money, Mr. Sulaiman was given 3 options which are:

i. Mr. Sulaiman has to pay a lump sum investment which is RM 448,108 for both his
children.
ii. Mr. Sulaiman can pay either monthly or yearly investment which he needs to invest
RM 53,795 annually or RM 4,090 monthly.
iii. The last option for Mr. Sulaiman to invest for his children education is by having the
hybrid of option 1 and 2 which is a lump sum and monthly or yearly investment. Mr.
Sulaiman needs to put aside sum lump sum amount and contribute for a yearly or
monthly contribution. Mr. Sulaiman had agreed to put RM 10, 000 as the lump sum
amount, and have to contribute an amount of RM 52, 593 annually or RM 3, 999
monthly.

It is good if he can take the option 3 which can reduce his burden to pay lump sum. He can
take from his current account amounting RM 10,000. But he must think about his life also. If
he invests too many for his children, this will affect his future life. This is because, he will
pay a lot of money just for his children and ignore for other expenses especially for himself
after retirement. My advice is, he can send his children to further their study locally because
the fees is much more cheaper compared to if send his children to different country because
the cost of living, fees, transportations are much higher. If his children get scholarship, it is
possible to send them to overseas.

2. Retirement planning

Mr. Sulaiman plans to retire from his work when he is 55 years old which will take place
another 20 years from now. He is desired retirement income when he is retired which is 75%
of his current gross household income = RM 90,000 (RM120, 000*0.75). Mr. Sulaiman can
save his money about RM 5,625 per year (RM 90,000/16=RM 5,625) for his retirement until
the age of 71.

In addition, his wife, Mrs. Suhaila plans to retire from his work when she is 55 years old
which will take place another 23 years from now. She is desired retirement income when she
is retired which is 75% of his current gross household income = RM 58,500 (RM78,

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000*0.75). Mrs. Suhaila can save her money about RM 2,786 per year (RM 58,500/21=RM
2,786) for her retirement until the age of 76.

Considering of the expected inflation rate is 3% and rate of return on investment during
retirement is 6%, the total capital required to generate annual income needed for retirement is
RM 2, 115, 383 for himself and RM 1, 847, 090 for his wife. Furthermore, the estimated EPF
balance at retirement age is RM 1, 430, 083 for himself and RM 1, 169, 662 for his wife. The
present value of balance of capital requirement at retirement age after considering 6% of
estimated rate of return on investment until retirement age is RM 213, 680 for himself and
RM 177, 349 for his wife.

There are 3 options that can be made by Mr. Sulaiman on his retirement planning which are:

i. A lump sum investment which is RM 391, 029 for both himself and his wife.
ii. A monthly or yearly investment which he needs to invest RM 1,491 monthly or RM
19, 747 annually for himself and RM 1, 150 monthly or RM 15, 280 annually for his
wife.
iii. The last option is the hybrid of option 1 and 2 which is a lump sum and monthly or
yearly investment. Mr. Sulaiman needs to put aside sum lump sum amount and
contribute for a yearly or monthly contribution. Mr. Sulaiman had agreed to put RM
10, 000 as the lump sum amount and his wife is RM 5, 000 plus the monthly
investment for himself is RM 1, 421 monthly or RM 18, 823 yearly for himself and
RM 1,117 monthly or RM 14, 849 annually for his wife.

It is good if he can choose the option 3 and take the investment amount of RM 15, 000 from
fixed deposit which is RM 10,000 from his account and RM 5, 000 from his wife account. It
can reduce the monthly or yearly amount of investment and fewer burdens to Mr. Sulaiman.

3. Takaful planning

Mr. Sulaiman takes the Family Takaful to cover his debt and also other expenses such as
educations, death and others. The amount of family takaful coverage needed by Mr.
Sulaiman is RM 1, 089, 320 and it will cover all the family future income needs and the
liabilities. Mr. Sulaiman's family future needs are to provide all dependents with income until
the youngest child reaches age 23 and to cover the cost of higher education for the children.
The liabilities will cover all of his loans and debts and the final expenses which include the

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medical expenses, burial cost, probate fees and etc. These total liabilities will be paid off at
death.

He needs total monthly income is RM 2, 860 and the current annual income required is RM
34, 320. Considering the inflation rate is 3% and estimate rate of return on investment is 6%,
total capital required to generate income to provide all dependents with income until
youngest child reaches age of 23 is RM 489, 377.

My advice is to take the Family Takaful which cover the debts in case if he die, education for
his children, cover his and his family medical benefits, his house and also to cover the
expenses such as medical expenses, burial cost, probate fees and others. So, he should invest
more in takaful because it is one of the things that people can do to overcome the risks. Risk
is everywhere. So, people have to prepare themselves to ensure that the benefit not only for
himself but for his family. Other than that, takaful is good because it has investment account
which he can get back the principal plus profit and donation (tabarru') account which is
contribution from participants to help others.

4. Estate planning

Estate planning is very important in ensuring that none of the heirs were discriminate from
getting the wealth that has been left by the deceased. In Islam, the religion already guides the
follower to do estate planning by using the law of inheritance (faraid). The faraid system
already determines the proportion that the heir should get from the deceased wealth. If Mr.
Sulaiman died, his total net worth will be distributed to his wife and his children. This is
because, Mr. Sulaiman's parents have passed away before him. His wife will get 1/8 from his
total net worth which is RM 47,061 and the remaining will be the residue to be distributed to
both of his child. His son will get 2/3 which is RM 219, 616 and his daughter will get 1/3 out
of the residue which is RM 109, 808.

5. Wealth purification

Wealth purification can be done through the payment of zakat. Zakat payment is one of the
pillars of Islam where muslims have to pay zakat when the zakatable item already reached it
nisab. The nisab of the zakatable item may be varied but the percentage to pay is fixed which
is 2.5 % of the zakatable value. The nisab for 2009 in Malaysia is RM 7, 900. So, the zakat

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payable per year is RM 2, 070 (RM 828, 800* 0,025) for himself and RM 1, 385.50 (RM 55,
420* 0.025) for his wife.

6. Others

For other recommendations, according to his risk profile, he should increase the investment
especially in unit trust. It is because, unit trust can give high return even though it might be high risk.
Generally, a defensive investment strategy is not recommended for those who are just
starting in their careers. At this stage, some amount of loss is acceptable, compared to the
gain that can be realized. Also, if a loss does occur, there is more time to make it back.

Other than that, if he want to reduce his expenses or debts, he can sell his or his wife's car
and buy a new car that cheaper than existing car. He also can sell his house and buy a new
house that cheaper than existing house that he already bought at Mount Kiara. If he still
works with Bank Muamalat at Melawati, he can buy a house near his and his wife's office so
that he can reduce the transportation expenses such as petrol and toll.

In addition, he also can reduce his expenses through his rental payment. Currently, he rent a
double storey terrace amounting RM 1, 700. If he rent an apartment or a Single Storey
Terrace, it might be cheaper. Furthermore, he should ensure that the house must be
convenient to stay and has at least 3 rooms because he has two children which are different
gender and they also want a comfort room for them to live.

7.0 Conclusion

According to the Mr. Sulaiman's financial health, it is still in a good condition because his
assets are more than liabilities. It shows that he still can manage his debts by investing in
bond and has other liquidity assets such as current account and fixed deposits. Furthermore,
he already plans for unexpected risk or events by taking takaful plan. This is one of the good
plans because if he died, there are still other sources that can help his family in future.

My advice is, he must control his consumption to ensure that he can manage his financial
risk properly. He also can invest in other types of investments such as unit trust, REITs,
sukuk, real estates and others. It is because, he is still young and has long way to go. So he
can take this risk because high risk is high return.

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APPENDICES

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Customer Profile

1. Family situation

a. Married Couple (max. 2 children under 18)

b. Both gainfully employed

c. Living in rented accommodation until own house is ready

2. Household Members

Customer Spouse Child 1 Child 2

Sex: Sulaiman bin Ali Suhaila bt Ahmad Syamsul Suraya

Age: 35 32 7 5

Employed as Manager Senior Executive N/A N/A

Annual Income RM 120000 RM 78000 N/A N/A

a. Assumption: They do not intend to have any more children

3. Residence (one only)

a. Rented

b. Type: Apartment, Semi-detached, Single-storey terrace, Double storey terrace

c. Location: Taman Melawati

d. Monthly rental of RM 1700

4. Living expenses

a. Family monthly living expenses (excluding rental) is RM 5000

5. Cash/ Near cash

Customer Spouse

Savings Account: Nil nil

Current Account: RM15000 RM 5000

Fixed Deposit RM 10000 RM 5000

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 a. Assumption: No structured savings plan to accumulate additional savings

6. Invested assets

a. Customer has invested in blue chip stocks listed on the Bursa Malaysia with a current
value of RM20,000 which pays dividend every year

b. Bought a condominium under joint name for RM500,000 in September, 2008 and paid a
20% down-payment (RM100,000). The condominium is expected to be completed in
2011 and they’re planning to move into it for own use.

c. RM400,000 mortgage loan payable over a period of 30 years with mortgage repayments
serviced with cash of RM2,528.27 per month which started on January, 2008.

d. Recent revaluation showed that condominium has appreciated by 10% to a value of

RM550,000 as at 31 December, 2009.

7. Personal use assets

a. Motorcar (one each):

Customer Spouse

Make & Model: Honda City 1.6 (A) Proton Satria 1.6 (A)

Date Purchase: July 2009 July 2000

Purchase Price: RM 90, 480 RM60,000

Down-payment paid 16%

Monthly Loan 1510 Loan fully repaid

Repayment

First instalment 15000

Current Market Value RM 75,000 RM35,000

b. Others:

i. Jewelry current value RM 9000

ii. Antiques collection current value RM 2000

8. Retirement assets

a. EPF account:

Customer Spouse

Balance as at 31/12/2009: RM 76, 500 RM 50, 320

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 Year contributions 2004 2006
started:

a. Assumption: They intend to retire at the age of 55

9. Credit card

a. Customer and Spouse are very discipline as they settle all their outstanding credit card
debts on a monthly basis

10. Risk management

a. Customer

i. Whole life (Sum assured: RM100,000; Annual premium: RM1,275)

ii. Whole life (Sum assured: RM50,000; Annual premium: RM623)

iii. Critical illness (Sum assured: RM50,000; Annual premium: RM947)

iv. Hospital and surgical (Annual premium: RM383)

b. Spouse

i. Whole life (Sum assured: RM75,000; Annual premium: RM1,690)

ii. Group employee medical benefit policy of RM75,000 provided by Company

Miscellaneous Facts & Assumptions

1. Inflation is expected to be steady at 3%

2. Expenses are expected to increase 3% annually
3. Gross investment rate of return is 6%
4. Returns from investment in shares is in the form of dividend and at the rate of 6%
5. Gross rate of return for cash/ near cash savings is 3.7%
6. Current mortgage interest rate is 6.5%
7. Salary increasing 2% annually
8. EPF rate of return is 5%
9. Life expectancy for Men is 71 years and for Women is 76 years respectively

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Part 1: Questionnaire about your investment context
and your experience of financial products
Question 1
When do you think you will need the money you are now investing or have invested?
 In less than 2 years A
 In 2 to 3 years B
 In 4 to 6 years C
 In 7 years or more D

Question 2
In recent years, you have noticed that your savings, not including your income:
 Have increased continually A
 Have remained constant B
 Are nil or almost nil C
 Have decreased slightly D
 Have decreased considerably E
 Have varied greatly from year to year F

Question 3
How do you expect your income (professional and private) to develop over the next 5
to 7 years?
 It will increase substantially A
 It will increase slightly B
 It will remain constant C
 It will decrease slightly. D
 It will decrease substantially. E

Question 4
Do you have any investment experience?
 No A
 Yes, in the following forms (more than one answer is possible) B
o A savings account C
o Government bond and cash vouchers or bonds in Ringgit D
o Bonds in foreign currencies (non-ringgit) E
o Shares F
o Investment-linked Insurance G
o Mutual Funds H
o Others I

Question 5
How do you regard your previous experiences with investing?
 Mainly positively A
 Mainly negatively B

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 In a neutral light C

Question 6
What proportion of the monthly family income is currently used to meet loan
obligations (mortgages, hire purchase loans (e.g. for a car, etc.)?
 Less than 20% A
 20% to 25% B
 26% to 35% C
 More than 35% D

Question 7
Which of these statements best describes your current approach to investing?
 I do not really enjoy managing my assets, and anyway I do not have A
enough time to do so.
 I enjoy keeping up to date with changes in my assets, but am not able to B
spend enough time in this area.
 I monitor changes in my portfolio closely, and examine the results C
regularly.
 I keep well informed, and manage my assets very actively. D

Question 8
Out of each pair, choose the investment that you believe presents the lower risk:
 Bond investment in Ringgit A
 Bond investment in foreign currencies B
 Malaysian shares investment C
 Foreign shares investment D
 Forward contract in foreign currencies E
 Forward contract in Ringgit F

Question 9
On average, how much time a week do you spend reading the investment section of
your newspaper or magazine?
 At least one hour per week A
 From half an hour to an hour per week B
 From 10 minutes to half an hour per week C
 Less than 10 minutes per week D

Question 10
Which statement best describes your current investment experience*?
 This is my first step in the world of investment. A
 I have been managing a portfolio of less than RM50,000 for a few years. B
 I have been managing a portfolio of between RM50,000 and RM100,000
for quite a few years now. C
 I have been managing a portfolio of more than RM100,000 for quite a
few years now, with or without help from an adviser at my bank. D
* Not including pension fund investments

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Total score for Part 1
Question A B C D E F G H I
1 0 5 25 40
2 15 10 5 1 0 5
3 15 12 7 4 1
4* 0 0 1 1 4 6 2 4 4
5 10 0 5
6 15 10 7 3
7 0 5 15 20
8* 4 0 4 0 0 4
9 15 10 5 0
10 5 10 15 20

TOTAL
* More than one answer is possible to this question. Add the total number of points to
your score.

Interpreting the results

You scored more than 135 points

Your experience and knowledge of the various investment formulas, taken together
with your personal situation, indicate that you can handle a more enterprising
investment strategy. We recommend a Dynamic Investment Strategy.

You scored between 105 and 135 points

Your answers indicate that higher levels of risk do not suit your personal situation.
You would be best served with a Neutral Investment Strategy.

You scored less than 105 points

Your score was rather low in a number of areas which are important if you want to be
able to take any risk. We recommend a more Defensive Investment Strategy.

Important: this first evaluation needs to be qualified in the light of the results of Part
2.

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Part 2: Questionnaire about your investor profile
Investor profile
Question 1
Which age category do you belong to?
 Under 40 years A
 41 to 55 years B
 56 to 75 years C
 Over 75 years D

Question 2
How long have you been actively involved in investing?
 Less than 5 years A
 More than 5 years B

Question 3
How would you describe your knowledge of investing?
 Good A
 Average B
 Low C

Your objectives
Question 4
What ambitions do you want to achieve overall with your investments over the next 5
years?
 To continue investing the capital and the income. A
 To continue investing the capital but use some or all of the income. B
 To use the income and the capital (or some of it). C

Question 5
For what purpose might you have to cash in all or some of your investment portfolio
during the next 5 years? If various possibilities apply, choose the most significant
one:
 Pension A
 Children’s studies B
 House purchase or extension C
 Other major purchase D
 Business investment E
 Travel/holiday F
 Other G
 None H

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And if I had the choice…

The following questions reflect theoretical investment possibilities. This means that
they do not necessarily represent investment products currently on the market. Keep
your present objectives in mind as you answer the questions. In other words, bear in
mind the amount, purpose and duration that you have been considering for your next
investment or reinvestment. In questions 6 to 9, you are presented with a choice
between two theoretical investment possibilities, A and B:
A. Guarantees an annual return of 4%
B. The range of annual returns (variable) is given in the tables. For example,
possibility B in question 6 has an expected return of 7% per year. Obviously,
this return is not guaranteed, and may in reality vary between 1% and 13% per
year.

Question 6
Product Return Variability
 Guaranteed 4% (No Variability) if you choose product A proceed to
question 7 A
 Expected 7% (Variability between 1% to 13%) if you choose product
B proceed to question 10 B

Question 7
Product Return Variability
 Guaranteed 4% (No Variability) if you choose product A proceed to A
question 8)
 Expected 6% (Variability between 3% to 9%) if you choose product
B proceed to question 9 B

Question 8
Product Return Variability
 Guaranteed 4% (No Variability) if you choose product A proceed to A
question 10
 Expected 7% (Variability between 3% to 9%) if you choose product
B proceed to question 10 B

Question 9
Product Return Variability
 Guaranteed 4% (No Variability) - I choose product A (proceed to A
question 10)
 Expected 6% (Variability between 2% to 10% ) - I choose product B
(proceed to question 10) B

Where the capital comes from

Question 10
What is the most important source of the capital you are currently investing?
(one answer only)

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  Inheritance A
 Income from work B
 Income from business activities C
 Capital from pension or life insurance D
 Income from investments E
 Reinvestment or reorientation of other investments (non-property or
property) F

Attitude towards investing

Question 11
Describe your attitude towards the following statement: I primarily seek to ensure
that my capital is protected. I have a conservative attitude towards risk-taking.
 Completely agree A
 More or less agree B
 Do not really agree C
 Completely disagree D

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Total score

In the table below, fill in the results of your answers to questions 1 to 11 in Part 2. For
example, if you answered A to question 1, your score is 45.

The final result or “final score” enables you to determine your risk profile in Part 3.

Question A B C D E F G H I
1 45 41 34 0
2 0 8
3 14 1 0
4 30 12 0
5 25 22 1 10 37 25 0 8
6 0 34
7 0 16
8 0 10
9 0 12
10 9 41 35 0 61 24
11 0 9 23 24

TOTAL

Your risk class for investment

The higher your total score, the more risk you are inclined to take. The table below
indicates the risk class of the investments that are most suitable for you.

Total Score for Part 2

From To Risk Class Remarks

0 150 A You do not like to take financial risks.
151 180 B You accept risks provided they remain
within reasonable limits.
181 and over C You are not afraid to take financial risks.

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Part 3: Synthesis
Compare your score from Parts 1 and 2 of the test and use the table below to find out
which investment strategy suits you best.

Score from Part 2 of the Questionnaire

Class A Class B Class C
(0 – 150 points) (151 to180 points) (more than180 points)
Score from Part 1
> 135 points Defensive Neutral Dynamic
105 to 135 points Defensive Neutral Dynamic
less than105 points Defensive Defensive Defensive

Note:
 This questionnaire is merely a tool to help your client to assess the level of risk he
or she is prepared to take as an investor. It does not in any way guarantee the
success of the strategy he or she decides to adopt later on.

 Since the answers given in this questionnaire give only a snapshot of your client’s
current situation, you are advised to ask your client to review them regularly in
the light of changes that could take place in the course of time.

 To be completed by your client with your assistance.

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 NET WORTH ANALYSIS

AS OF 31 DECEMBER, 2009

ASSETS Client Spouse Total Rate LIABILITIES Client Spouse Total

RM RM RM & RM RM RM
Cash & Cash Equivalent Current Liabilities

Cash 3,000 2,000 5,000 Overdraft 0 0 0

Savings/Current Account 15,000 5,000 20,000 Credit Card Balance 0 0 0

Fixed Deposit 10,000 5,000 15,000 Income Tax Liabilities 0 0 0

Cash Value of Life Insurance 0 0 0 Long-Term Liabilities

Investment Assets Property loan 390,759 0 390,759

Stocks and Bonds 20,000 0 20,000 Car Loans (Principal + Interest) 90,576 0 90,576

Units Trusts/ Unit Linked 0 0 0 0

Properties 0 0 0 0

Others 0 0 0 0

EPF 76,500 50,320 126,820 0

Personal-Use Assets

Own home 550,000 0 550,000 0

Home Furnishing 0 0 0 0

Cars 75,000 35,000 110,000 0

Other Assets - Jewelry 0 9,000 9,000 0

Club memberships 0 0 0 0

Other miscellaneous assets 2,000 0 2,000 0

TOTAL ASSETS 751,500 106,320 857,820 TOTAL LIABILITIES 481,335 0 481,335

(A) (B)

NETWORTH (A) - (B) 270,165 106,320 376,485

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 CASH FLOW ANALYSIS

AS OF 31 DECEMBER, 2009

INFLOW Monthly Yearly Total OUTGOING Monthly Yearly Total

RM RM RM RM RM RM
Income Outflows

Salary (net of tax & EPF) 7,400 88,800 88,800 Rental expense 1,700 20,400 20,400

Spouse's Salary (net of tax & EPF) 4,810 57,720 57,720 Living expenses 5,000 60,000 60,000

Investment 0 0 0 Transportation 0

Business Income 0 Housing Loan Repayment 2,528 30,339 30,339

Rental 0 Car Loan Repayment 1,510 18,120 18,120

Dividends-Sulaiman 100 1,200 1,200 Insurance Premium-(Sulaiman+Suhaila) 410 4,918 4,918

Profit - Sulaiman 77 925 925

Profit - Suhaila 31 370 370

Bonuses 0

Others 0

TOTAL CASH INFLOW 149,015 149,015 TOTAL CASH OUTFLOW 133,777 133,777
(A) (B)

NET CASH INFLOW 15,238 15,238

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Retirement Analysis

Client Spouse
Current Age = 35 32

Desired Retirement Age = 55 55

Years to Retirement = 20 23

Current Annual After Tax Income (RM) = 102,000 66,300

Current Value of Annual Income Needed for Retirement (RM)-75% = 90,000 58,500

Estimated Inflation Rate (%) = 3% 3%

Future Value of Annual Income Needed At Retirement Age (RM) = 162,550 115,455

Years of Retirement [assuming living to age 71/ 76] 16 21

Estimated Rate Of Return On Investment During Retirement (%) = 6% 6%

Total Capital Required To Generate Annual Income Needed for Retirement (RM) = 2,115,383 1,847,090

Estimated EPF Balance At Retirement Age (see below) (RM) = 1,430,083 1,169,662

Balance Of Capital Requirement At Retirement Age (RM) = 685,299 677,428

Estimated Rate of Return On Investment Until Retirement Age (%) 6% 6%

Present Value of Balance of Capital Requirement At Retirement Age (RM) 213,680 177,349

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OPTIONS AVAILABLE TO OBTAIN THE BALANCE OF CAPITAL REQUIREMENT AT RETIREMENT AGE
ARE AS FOLLOWS:-

OPTION 1 - LUMP SUM INVESTMENT ONLY

Current Lump Sum Investment Required (RM) 213,680 177,349

OPTION 2 - MONTHLY/ YEARLY INVESTMENT ONLY

Current Monthly Investment Required (RM) 1,491 1,150

or or or

Current Yearly Investment Required (RM) 19,747 15,280

OPTION 3 - LUMP SUM & MONTHLY/ YEARLY INVESTMENT ONLY

Current Affordable Lump Sum Investment (RM) 10,000 5,000

Future Value of Lump Sum Investment (M) 32,071 19,099

Capital Shortfall (RM) 653,228 658,329

Balance of Monthly Investment Required (RM) 1,421 1,117

or or or

Balance of Yearly Investment Required (RM) 18,823 14,849

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EPF ANALYSIS

Current EPF Balance (RM) 76,500 50,320

Years to Retirement 20 23

Estimated Rate of Return until Retirement Age (%) 5% 5%

Future Value of EPF Balance At Retirement Age (RM) 202,977 154,559

Current Gross Annual Income (RM) 120,000 78,000

Current Annual EPF Contributions (RM) 27,600 17,940

Estimated Salary Increment (%) 2% 2%

Future Value of Annual EPF Contribution (RM) 1,227,106 1,015,103

Estimated EPF Balance At Retirement Age (RM) 1,430,083 1,169,662

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Children Education Analysis

Name of Children

Child 1 Child 2

Current Age = 7 5

Years to College/ University = 12 14

(Assume age 19 years old first enter University)

Current Estimated Annual Education Costs (RM) = 80,000 90,000

Future Value of Estimated Annual Education Costs (RM) = 114,061 136,133

Years to Complete The Course = 4 4

Estimated Inflation Rate of Education Costs (%) = 3% 3%

Total Estimated Education Fund Required (RM) = 437,238 521,848

Estimated Rate of Return On Investment (%) 6% 6%

Present Value of Estimated Education Fund Required (RM) 217,294 230,814

TOTAL RM 448,108

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Zakat Planning

Items Suhaimi Suhaila

Yearly Gross Income 120,000.00 78,000.00

(less) Yearly Expenses

Personal (RM9000) 9,000.00 9,000.00

No. of Wife (RM3000) per person 3,000.00 -

No. of Child (RM1000) per person 2,000.00 -

Contribution to Parents yearly 10,000.00 5,000.00

EPF: 11% x yearly 13,200.00 8,580.00

Contribution to organisations that pay zakat per year, e.g. Tabung Haji, MOCCIS, Takaful - -

Total Reduction (B) 37,200.00 22,580.00

Nisab 7,900.00 7,900.00

Zakat Calculation

Income Entitled for Zakat 82,800.00 55,420.00

Zakat payable per year (2.5% * income entitled for zakat) 2,070.00 1,385.50

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