CASE STUDY
Priscilla Cher is a senior wealth manager who works for UBS Singapore for the past 8 years. She earns about S$180,000 per year, is single, owns a Mercedes CLX (open top) which her father gave her
for her 21st birthday, and lives in a high-end rented apartment off Holland Village. Priscilla owes S$45,000 in four platinum credit card accounts which have increased gradually over the last few
years. She is sick of paying high interest and never having any ‘spare cash’ to get ahead. Priscilla has SUHD 55-inch Smart TV, 3 Macbooks, 2 IPad-Minis, 2 Iphones, 15 pairs of Prada shoes, eats
out all nights and enjoys regular Friday nights out with her friends. The Friday night dinners (usually for 4) are accompanied by expensive red wines and usually seldom goes outside the city area
of Singapore as most of her clients are within the business district where she works.
Priscilla became more concerned about her less than comfortable financial position when an old friend from the university days bought a private apartment for cash in a nearby area where she stays.
Her friend had come from a poor family and had been working the same length of time, so Priscilla decided it must really be possible to save and get ahead of her own life including owning her own
dream private apartment.
You are now engaged as Wealth Manager assigned to handle Priscilla’s situation.

Question:
a. Using Behavioural Finance concept, identify Priscilla’s behavioural traits that could impact on her future investment decisions.
HINT:
1. Information to behavioural finance.
– short academic into on behavioural finance
-briefly introduce the straits of behavioural finance to be applied onto Priscilla
2. Selective Perception
– Academic information to selective perception
– Relate academic theory of selective perception onto Priscilla
3. Short summary

b. What would be a suitable investment portfolio for Priscilla to meet her goals and tax issues? You are required to provide your explanation/reasons to support your recommendation of a suitable
investment portfolio?

HINT: 1.choose the most appropriate CIP rating for Priscilla and explain/analysis.
2. a suitable investment portfolio for Priscilla to meet her goals and tax issues, explanation and reason

Client Investment Profile
CIP Rating CIP Profile Description
1 Risk Averse The customer’s sole objective is to preserve the capital and achieve returns based on prevailing deposit rates which may or may not keep pace with the rate of inflation. The
customer is not willing to invest in any products where the capital is at risk. Suitable product is like Time Deposit.
2 Conservative The customer seeks to achieve above deposit rate returns and protect the capital against inflation. The customer is willing to accept very low levels of investment risk over
the medium term (up to 2 years). The value of the customer’s investment can fluctuate and may fall below his/her original investment. While volatility is expected to be low, short‐ term losses may
be higher. Suitable products are like Balance Fund, Money Market Fund, Bond Fund, Investment Grade Senior Secured Bond.
3 Moderate The customer seeks to achieve a moderate level of capital growth on the investments and the customer is willing to accept moderate levels of investment risk over the medium
to long term (up to 3 years). The value of the investments can fluctuate and may fall below his/her original investment. While volatility is expected to be moderate, short‐term losses may be
higher. Suitable products are like Balance Fund, Bond Fund, Equity Bond, Investment Grade Senior Unsecured Bond.
4 Moderately Aggressive The customer seeks to achieve a moderate to high level of capital growth on the investments and the customer is willing to accept high levels of investment risk and
volatility over the short, medium and long term. The value of the customer’s investments can experience high levels of fluctuations and may fall substantially below the original investment.
Suitable products are like Balance Fund, Bond Fund, Equity Bond, Investment Grade Subordinated Bond, Rate Linked Offshore Structure Product (100% Protective), Structured Investment, Premium
Currency Investment, 70%‐ Premium Currency Investment, ETF and Offshore Equity.
5 Aggressive The customer seeks to achieve significant capital growth on the investments and the customer is willing to accept very high levels of investment risk and volatility over the
short, medium and long term. The value of the investments can experience very high levels of fluctuations and may fall substantially below the original investment. Suitable products are like
Balance Fund, Equity Bond, Perpetual Securities, BBB/BBB+ Credit Rating Bond, Hybrid Linked Offshore Structure Product (100% Protective) 、ETF and Offshore Equity.
6 Very Aggressive The customer seeks to achieve exceptional capital growth on the investments and the customer is willing to accept extreme levels of investment risk and volatility over the
short, medium and long term. The value of the investments may fall substantially below the original investment, with the potential to lose the value of the entire investment. Suitable products are
like Perpetual Securities, BBB/BBB+ Credit Rating Bond, Equity Linked Offshore Structure Product (100% Non‐ Protective), ETF and Offshore Equity.