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Investment Suitability Tool

This tool is designed to help you understand how much risk you are prepared to accept when making an investment decision. It is not trying to place you, as a person, in a particular risk category, but rather guide you on the amount of risk you might want to take if you are looking at a specific investment decision. It also aims to help you understand how an investment matched to this level of risk might behave.

It is important to be aware that there are a number of different ways to look at assessing appetite for risk and it is not an exact science. This tool does not take into account all your personal circumstances and therefore the calculations may not be appropriate to your personal circumstances. You should not rely solely on this tool to make an investment decision. In all cases we recommend that you consult a Financial Broker or Advisor who will conduct a full financial review and fact-find with you and advise you accordingly.

The calculations provided by the Friends First Investment Suitability Tool are for general illustration purposes only, based on the limited inputs you have given and assumptions built into the tool. Although Friends First endeavours to ensure that this 'Investment Suitability Tool' is accurate, we cannot guarantee it is free of errors or suitable for any user's intended purposes. To the extent permitted by law, under no circumstances will Friends First be liable for any investment loss or damage caused by a user's reliance on information obtained by using this calculator.

How does this tool work?

We bring you through five steps to help you understand what sort of investment is likely to be most suitable for you.

Please tick the boxes below to see full explanation here >

There are a number of different types of risk you need to consider before making an investment. In the first step we take a look at some of these risks.
We ask you a few questions to help understand your general attitudes to investing and what you expect from the investment you're about to make.
Based on your answers to the questions, we will suggest an investment type which may be suitable and show you how it might behave.
We check if the suggested investment type was what you had in mind or if you would like to consider something else.
We then show you some funds from Friends First range of investments which would match the investment type required.

Finally you can save or print out a report as a record of the process you have just gone through.

1. What do we mean by risk?

There are a number of different types of risk you need to consider before making an investment. Here are just a few to think about.


Market Risk

This is the first thing most people think about when they consider investment risk.

The risk that markets may fall in value and you may lose some of your initial investment.

How would you feel if this happened?

Inflation Risk

Although your initial investment may be intact, the growth on it may not have kept pace with inflation. This means that you would be able to buy less with it at the end of the investment term than at the start.

Counterparty Risk

You may invest in a product which provides a guarantee.

Counterparty Risk is the risk that the institution providing the guarantee isn't able to honour its promise.

This risk also applies to funds which invest in bank deposit accounts, corporate or government bonds.

Liquidity Risk

You might plan to invest for a long time but your circumstances can change unexpectedly.

You should take into account that not all investments are easy to get out off early.

Some may not give you the full value you might expect, others may not allow you access at all.

Concentration Risk

This is the "all your eggs in one basket" risk.

If too much of your wealth is concentrated in too few assets, or asset types, you are increasing the impact on you if anything happens to one of them.

A few questions: 1. Investment Experience

We are now going to ask you 5 simple questions so we can understand a bit more about your investment experience and attitude to risk

How experienced an investor are you?

A few questions: 2. Importance of this Investment

How important to you, is the investment you are considering now?

A few questions: 3. Safety of this Investment

Thinking of the investment you are about to make, do you agree/disagree with the following statement: 'I want my investment to be safe even if it means lower returns in the long run'

A few questions: 4. Risk and Return Expectations

What risk and return expectations do you have for this investment?

A few questions: 5. Attitude to Short Term Loss

In order to achieve higher returns you need to be comfortable with short term loses.

What is the maximum percentage loss you could tolerate in any 12 month period, before becoming uncomfortable?

Please click and drag the slider button below to indicate your maximum percentage loss.



3.  Investment Suitability

Based on your responses, a very conservative investment might be suitable for your needs.

You are likely to need an investment which gives some form of capital protection and should talk to your Financial Broker or Adviser about possible options.

When looking at products which provide capital protection you need to be particularly aware of:

  • Counterparty Risk
  • Inflation Risk
  • Liquidity Risk
3.  Investment Suitability

Risk Rating: 

Based on your responses, an investment ranked   out of 7 on our Risk Scale might be suitable for your needs. We would describe such an investment as   Risk.

Although an investment's risk can change over time, we can give you a feel for the types of return an investment with a risk rating of   may demonstrate if its risk stays constant.

We do this over the next few screens which will help you decide if it's the right investment for you.

How we measure Risk

We use the European Securities and Markets Authority (ESMA) risk scale. This scale is widely used throughout the investment industry and uses volatility to classify different investments along a 7 point risk scale. Volatility is a measure of how much an investment's value goes up or down over a given time.

Click here for more information on the ESMA risk scale.

3. Investment Suitability: Investment Type

Risk Rating:    out of 7 -   Investment

A diversified investment will have a mix of defensive and growth assets.

This mix will determine how risky the fund is and what would be a reasonable long term growth potential. The more growth assets held the riskier the investment but the higher the long term growth potential.

A fund with a risk rating of   is likely to have  . Based on Society of Actuaries in Ireland guidelines,  % p.a. would be a reasonable long term expected return for such an investment.

Long Term Expected Return

This is an annual figure and does not take account of charges or inflation

3. Investment Suitability: Short Term Volatility

Risk Rating: 

Long Term Expectation
Range of probable outcomes in any 12 month period*

Although it is reasonable to have a long term expected return, the returns in any one year are going to be higher or lower than this.

Depending on the expected volatility of the investment, it is possible to estimate a range of annual outcomes which would be deemed 'normal' for that type of investment.

The graphic opposite illustrates the likely spread of annual returns. You will see that most of the time returns will be around the long term expected return. However, more extreme outcomes are probable.

*This assumes 95% probability, more extreme outcomes are possible.

3. Investment Suitability: Long Term Volatility

Risk Rating: 

Long Term Expectation
Range of possible outcomes after   years investment term*

Over time your investment will have both good and bad years.

The longer your investment period the predicted range of annual returns will get closer to the long term expectation.

Adjust the term on the graph to see the effect of this.

However, you should also note the impact of compounding. A small annual profit or loss, over a long period of time, can have quite an impact on the value of your investment.

*This assumes 95% probability, more extreme outcomes are possible.

4. Validation

Risk Rating: 

You have just seen how an investment with a risk rating of   might behave.

Before we show you some funds which might be suitable for you, can you confirm that having seen the possible risk and return outputs of an investment rated   out of 7, you are comfortable that such an investment might meet your needs.

Agree Risk Level & Continue to View Fund Range

Alternatively you can look at a   risk option.

View Higher Risk Option
View Lower Risk Option
5. Fund Options

The following is a list of Friends First Funds with a risk rating of  .
You should discuss the suitability of these, or other funds, with your Financial Broker.
For more information on our complete range of funds visit our Fund Centre.

Please tick the boxes below to see full explanation here >

Customise Report Screen

6.  Customise Report

Complete those fields below you wish to include in your report. Logos can be png, jpg or gif format and will be scaled where more than 200 pixels high.

7.  Include Additional Information

Check the boxes for the elements below you wish to include
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