Definitions

Risk Tolerances

Conservative

I am willing to accept the potential for the lowest return in exchange for the potential lowest fluctuation in my account value even if it may not keep pace with inflation.

Moderate conservative

I am willing to accept a relatively low return in exchange for relatively low fluctuation in account value.

Moderate

I am willing to accept a moderate return in exchange for some fluctuation in account value.

Moderate aggressive

I am seeking a relatively high return potential and am willing to accept the possibility of high fluctuation and substantial loss in my account value.

Aggressive

I am seeking the highest return potential and am willing to accept the highest fluctuation and could lose most or all of my account value.

Investment Objectives

Primary Objectives: A primary objective must be selected on the clients CIP, as well as any LOU. The objective on the CIP should be considered as the household objective, whereas an LOU may have a different objective. EXAMPLE: New client selects Growth and Income as their objective on their new CIP. While opening a Roth and a NQ account they complete two LOU’s. One LOU is marked Income, while the other is marked Growth.

GROWTH

Investors who seek investments primarily focused on achieving high capital appreciation with little emphasis on the generation of current income. Investors using this approach expect to have higher-than-average increases in revenues and returns and accept a higher risk.

GROWTH & INCOME (Combination of above definition and below)

For investors who seek both higher returns from capital appreciation and some current income by investing the portfolio primarily in growth equities which produce little or no current income and in income producing investment of all grades, while recognizing and accepting the increased risks associated with investment of this type. Investors accept some risk and greater volatility than the “income” objective in this category.

INCOME

Investors who seek investments primarily focused on the continued receipt of current income, while recognizing and accepting market and issuer risks inherent in investments of this type. Investors in the category are usually seeking income above the market average but carry higher risks and can be more volatile than the general market.

Secondary Objectives: secondary objectives may be included on LOU’s when appropriate.

SPECULATION

The most aggressive investment objective category. This investment approach seeks maximum gain and accepts maximum risks. Investors who seek investments focused on speculation seek the highest gains without regard to holding period and accept the potential of the entire loss of their principal in return for the potential gain. Generally, a client may not commit more than 20% of their liquid net worth, towards a speculative strategy. Additionally, a client may not generally commit more than 10% of their liquid net worth towards a single speculative product. Harbour defines liquid net worth as the amount of assets held through Harbour which are free of sales charge.

Generational Planning

This secondary objective earmarks the assets held in this account as intended for the heirs of the account holder. This secondary objective may be used to explain the addition of a death benefit rider on an annuity, or an abnormal risk tolerance on assets which are not needed to support the account holder in negative market conditions or limited liquidity environments, and/or any other scenario in which signifying assets as earmarked for the heir may be appropriate. Unlike speculation, this secondary objective is intended to be applied to the entire account and not a portion of it.