Use 17 fact-based questions in FactMaster to determine the suitability of different investment alternatives — a NYSE Rule 405(b), SEC and NASD requirement. Consider how various investment classes are related to your client’s investment objectives, financial needs and sophistication. Then determine how these variables interrelate to produce a set of appropriate investment classes.

QUESTIONNAIRE

FactMaster uses a carefully-developed Suitability Questionnaire of 17 objective fact-based questions to gather the client information it needs. The questionnaire was developed by academic researchers commissioned by the NYSE. The Suitability Questionnaire covers three broad areas:

• Investment Objectives. Five questions capture the client’s expectations about investment performance.

ANALYSIS

FactMaster uses sophisticated mathematical techniques to calculate suitable investment ranges for a particular client. It does not use an oversimplified approach of summing the responses and fitting the client into a particular range. FactMaster’s approach produces more consistent results which consider the inter-relationship between all of the variables.

To do this, each category of questions, and each individual question, is ranked and weighed in importance in determining investment suitability (defaults have already been developed for you). Separately, each suitability question is weighed against five characteristics of each asset class: expected return, risk (standard deviation), yield, turnover and taxes. The asset classes can be linked to those used in AllocationMaster.

COMMENTARY

A detailed written Client Commentary can be easily produced in FactMaster which fully explains, in easy-to-understand terms, how the model results were derived.

Each of the 17 suitability questions and individual client responses are addressed in the Client Commentary.

First, the commentary explains in general terms how each suitability question might relate to determining appropriate investments for any client. Then, each client response is specifically analyzed.

The result is a two-page detailed analysis customized for the client which provides specific direction in selecting suitable investments.