Brooks Macdonald Investment

Services Target Market Guide March 2020

FOR PROFESSIONAL ADVISERS ONLY

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Contents

Product Governance ................................................................................................................................................................................................... 2 Bespoke Portfolio Service (BPS)............................................................................................................................................................................. 3 BPS Alternative Investment Market (AIM) Portfolio Service ................................................................................................................... 4 Responsible Investment Service (RIS): Advance ............................................................................................................................................ 5 Responsible Investment Service (RIS): Avoid ................................................................................................................................................. 7

Decumulation Service ................................................................................................................................................................................................ 8

Managed Portfolio Service (MPS) in Brooks Macdonald Nominee ........................................................................................................ 9

Managed Portfolio Service (MPS) on Platforms .......................................................................................................................................... 10

Responsible Investment Service (RIS): Advance on Platforms ............................................................................................................. 11 Responsible Investment Service (RIS): Avoid on Platforms ................................................................................................................... 13

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Introduction The information in this document is intended to aide professional advisers in completing target market assessments. Our Approach to Product Governance

For the purposes of Product Intervention and Product Governance Sourcebook (PROD) rules, Brooks Macdonald is a distributor of the investment services included in this guide.

To ensure we meet our PROD obligations, the appropriate governance arrangements have been put in place (including committees and policies) to ensure that services are designed to meet the needs of an identified target market and that all reasonable steps are taken to ensure distribution to that target market. We have a Product Design and Governance Committee to provide effective management and oversight of matters relating to the initiation, development and ongoing review of products, services and distribution channels. This Committee ensures that the regulatory requirements are adhered to, as laid out in the PROD rules, and are reflected in our product design and approval. The Committee takes specific responsibility for ensuring that all services meet (and continue to meet) customer needs. The services that we distribute undergo periodic reviews. These reviews consider risks that could materially affect the identified target market. They also ensure that the product or service remains consistent with the needs of its target market; this includes consideration of any distribution strategy. Brooks Macdonald is Co-Manufacture of the Brooks Macdonald Multi Asset funds. Target Market information for these funds can be found on the IFSL website. Our Approach to Target Market Assessments

Where we act as a distributor of financial instruments through the inclusion of assets in portfolios, we assess the compatibility of these with the needs of end clients. Assessments include consideration of the clients’ risk appetite, the impact of costs and charges, and the financial strength of any product manufacturers. We also consider manufacturers’ defined target markets and the knowledge of our client base. To ensure that financial instruments distributed to clients are fully understood, our investment managers are required to complete detailed due diligence on investments. For all instruments used within our Centralised Investment Process, this due diligence is reviewed and approved by an Asset Selection Committee. For further information on the details of our due diligence processes for financial instruments, please refer to our Standard Due Diligence Questionnaire. In instances where adequate information is not publicly available from the manufacturer, we undertake additional due diligence to ensure that the target market can be determined with sufficient granularity. We are not a manufacturer of the services included in this guide; however, we are part of a distribution chain. We have set out the target markets for each of our services to ensure that Professional Advisers are provided with the relevant information. From time to time, Brooks Macdonald may request information from you to understand if there have been any sales outside of the target market.

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Bespoke Portfolio Service (BPS) This service is designed for clients that wish to benefit from the expertise of a dedicated discretionary fund manager in creating a bespoke portfolio. It utilises our Central Investment Process to meet investors’ objectives and needs, as described below. This service is also designed for clients that wish to benefit from the expertise of a dedicated discretionary fund manager whilst creating a Specified Portfolio Mandate (SPM) outside our Central Investment Process to meet their specific objectives and needs, as described below. Only certain types of SPM mandates can be arranged, and at our discretion. We only offer this service on a discretionary basis, which means that the dedicated investment manager will make investment decisions on your client’s behalf, using their expertise and knowledge. As such, the portfolio may contain both complex and non-complex products. This service has been deemed potentially suitable for the following target market: 1. Types of investor: The service is designed for clients that want an individual investment portfolio constructed to meet their specific requirements (i.e. fully bespoke). It has a minimum investment amount of £250,000. We provide services on the basis that clients are Retail Clients for the purposes of the FCA including Charities and Court of Protection (CoP) clients. 2. Client’s knowledge and experience: The service is suitable for clients who have limited knowledge and experience of investments, those with previous knowledge and experience of investments, and active investors. 3. The client’s capacity for loss and ability to withstand loss: The service offers no capital guarantees and clients must have an ability to sustain capital loss. 4. The risk/reward profile of the service:

The service offers five risk levels for clients to choose from, based on their risk profile. 5. The type of financial needs and objectives of the client The service offers both growth and income objectives, and combinations of each. The minimum investment time horizon is three years for clients with a “low” risk level, and five years for all others. For UK clients we offer a sterling portfolio option. We offer a Specified Portfolio Mandate (SPM) service for clients that have unique preferences or investment restrictions.

Who the service is not suitable for? The service is not deemed suitable for investors that have no ability to sustain a capital loss, or those with an investment time horizon of less than three years.

Costs The costs and charges for this service can be found in personalised client investment proposals. For standard costs based on the minimum investment amount, please refer to our website and fee schedule.

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BPS Alternative Investment Market (AIM) Portfolio Service This service is designed for investors that wish to benefit from the expertise of a discretionary fund manager in creating a specified portfolio to meet their specific objectives and needs, as described below. We only offer this service on a discretionary basis and clients are required to be introduced by a regulated financial adviser who takes responsibility for the assessment of suitability. The service is managed by a dedicated team of investment managers that makes investment decisions using their specific expertise and knowledge outside our Central Investment Process. This service has been deemed potentially suitable for the following target market: 1. Types of investor:

The service is designed for clients that want an individual investment portfolio constructed to meet their specific requirements (i.e. fully bespoke). It has a minimum investment amount of £100,000. We provide services on the basis that clients are Retail Clients for the purposes of the FCA Rules. 2. Client’s knowledge and experience:

The service is suitable for clients who have limited knowledge and experience of investments, those with previous knowledge and experience of investments, and experienced investors. 3. The client’s capacity for loss and ability to withstand loss: The service offers no capital guarantees and clients must have an ability to sustain capital loss. 4. The risk/reward profile of the service:

The service will maintain a fully invested position in a single asset class and region. The portfolio will consist of smaller-capitalisation companies and as such prospective clients should be able to accept a high level of risk and expect prolonged periods of heightened volatility. 5. The type of financial needs and objectives of the clients The service has a specialist nature. As certain AIM listed companies qualify for Business Property Relief, many prospective clients will consider AIM investment as part of a broader Inheritance Tax mitigation strategy. The service does not target, nor guarantee, any particular income level. The minimum investment time horizon is five years. For UK clients, we offer a sterling portfolio option.

Who the service is not suitable for? The service is not suitable for those investors that have been assessed as having an attitude to risk or capacity for loss inconsistent with potentially volatile smaller companies investing, or those with an investment time horizon of less than five years.

Costs The costs and charges for this service can be found in personalised client investment proposals. For standard costs based on the minimum investment amount, please refer to our website and fee schedule. It is important to note that Business Property Relief (BPR) is not guaranteed and remains at the discretion of HMRC to be determined on the death of the individual. The BPR tax regime could be withdrawn by the UK Government at any point in the future. Brooks Macdonald does not provide tax advice.

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Responsible Investment Service (RIS): Advance Strategy The RIS Advance Strategy is designed for clients with the dual objective of Responsible Investment and return generation, in line with defined risk profiles. The service invests in collective investment schemes that advance businesses which provide solutions to sustainability issues, or have strong corporate policies and outputs relating to Environmental, Social and Governance (ESG) criteria. The focus is on identifying and investing in businesses that are working towards a more sustainable future. The service is integrated into our centralised investment process and additional stages are incorporated to assess both the fundamental investment rationale for including an investment and its alignment with the values-based criteria. Our research considers funds that use a variety of different approaches to responsible investment, including Impact, Thematic, ESG best in class, ESG integration and Exclusionary screening. Similarly, the service invests in funds that address a range of sustainability issues, some examples of those that may be considered are set out below. • Environmental: Water, waste, plastic pollution, deforestation, biodiversity, toxic emissions, clean energy,

carbon footprint, decarbonization, transition economy and energy efficiency.

• Social: Working conditions, health & safety, equal opportunities, labour relations, collective bargaining, modern slavery, child labour, supply chain issues, inequality, lack of access to resources, land rights, food & nutrition, data privacy and community relations.

• Governance: Anti-bribery & corruption, audit issues, board balance, board diversity, remuneration, business

ethics, director independence, shareholder rights, accountability, cyber security and tax. It is important to note that we only offer this service on a discretionary basis, which means that the dedicated investment manager will make investment decisions on your client’s behalf, using their expertise and knowledge. This service has been deemed potentially suitable for the following target market: 1. Types of investor: The service has a minimum investment amount of £250,000. We provide services on the basis that clients are Retail Clients for the purposes of the FCA Rules. 2. Client’s knowledge and experience: The service is suitable for clients who have limited knowledge and experience of investments, those with previous knowledge and experience of investments, and active investors. 3. The client’s capacity for loss and ability to withstand loss: The service offers no capital guarantees and clients must have an ability to sustain capital loss. 4. The risk/reward profile of the service:

This service offers four risk profiles. These are Low-to-Medium risk, Medium risk, Medium-to-High risk and High risk. 5. The type of non-financial needs and objectives of the client The service is targeted at clients who want to support broad sustainability goals, that is businesses that either specifically seek to provide solutions to sustainability issues, or businesses that have strong corporate policies and outputs relating to environmental, social and governance criteria.

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6. The type financial needs and objectives of the client This service offers both growth and income objectives. The minimum investment time horizon is five years. For UK clients, we offer a sterling portfolio option.

Who the service is not suitable for? The service is not deemed suitable for investors that have no ability to sustain a capital loss, low risk investors or those with an investment time horizon of less than five years. The service may not be suitable for clients that are interested in addressing very specific environmental, social or governance issues, and therefore are not aligned to supporting broad sustainability goals.

Costs For standard costs based on the minimum investment amount, please refer to the fee schedule.

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Responsible Investment Service (RIS): Avoid Strategy

The RIS Avoid Strategy is designed for clients with the dual objective of Responsible Investment and return generation, in line with defined risk profiles. The values-based objective of the Avoid strategy is to prevent exposure to companies involved in the production of armaments, tobacco, alcohol, pornography and gambling. Due to the rigid nature of this objective, our assessment is based on investment restrictions relating to these five industries. The service is integrated into our centralised investment process and additional stages are incorporated to assess both the fundamental investment rationale for including an investment and its alignment with the values-based criteria of our Responsible Investment Service. We monitor all approved investments to ensure their restrictions remain aligned to ours. It is important to note that we only offer this service on a discretionary basis, which means that the dedicated investment managers will make investment decisions on your client’s behalf, using their expertise and knowledge. This service has been deemed potentially suitable for the following target market: 1. Types of investor: The service has a minimum investment amount of £250,000. We provide services on the basis that clients are Retail Clients for the purposes of the FCA Rules. 2. Client’s knowledge and experience: The service is suitable for clients who have limited knowledge and experience of investments, those with previous knowledge and experience of investments, and active investors. 3. The client’s capacity for loss and ability to withstand loss: The service offers no capital guarantees and clients must have an ability to sustain capital loss. 4. The risk/reward profile of the service:

This service offers four risk profiles, these are Low-to-Medium risk, Medium risk, Medium-to-High risk and High risk. 5. The type of non-financial needs and objectives of the client The service is targeted at clients who want to prevent exposure to companies involved in the production of armaments, tobacco, alcohol, pornography and gambling. 6. The type of financial needs and objectives of the client This service offers both growth and income objectives. The minimum investment time horizon is five years. For UK clients, we offer a sterling portfolio option.

Who the service is not suitable for? The service is not deemed suitable for investors that have no ability to sustain a capital loss, low risk investors, or those with an investment time horizon of less than five years. The service is not suitable for those clients whose values are not aligned to the avoidance of exposure to armaments, tobacco, alcohol, pornography and gambling.

Costs The costs and charges for this service can be found in personalised client investment proposals. For standard costs based on the minimum investment amount, please refer to the fee schedule.

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Decumulation Service Our Decumulation Service is a bespoke approach to a particular stage in life where clients are relying on investments and savings to generate a required level of income, typically during retirement.

It seeks to achieve this via a two-portfolio structure; a short-term portfolio shields the client from market downturns in the early years of their retirement, while a longer-term portfolio provides growth and combats the negative wealth effects of inflation. This approach provides flexibility to accommodate changes in the client’s requirements. The Service is targeted at clients that have the dual objective of an income requirement and long-term portfolio growth, in line with defined risk profiles. It is potentially suitable for the following target market: 1. Types of investor: The service has a minimum investment amount of £500,000 We provide services on the basis that clients are Retail Clients for the purposes of the FCA Rules. 2. Client’s knowledge and experience: The service is suitable for clients who have limited knowledge and experience of investments, those with previous knowledge and experience of investments, and active investors. This service is only provided through professional advisers, due to the need for detailed cashflow planning and the complex nature of structured return investments utilised within the service. Structured products are complex investments which may not be suitable for all investors. Client capital is at risk and returns are not guaranteed. 3. The client’s capacity for loss and ability to withstand loss: The service offers no capital guarantees and clients must have an ability to sustain capital loss. 4. The risk/reward profile of the service:

This service offers three risk levels for clients to choose from, based on their risk profile. These are medium risk, medium-to-high risk and high risk. 5. The type of financial needs and objectives of the client: The Service is designed for clients that are either withdrawing income from their portfolio, or those who plan to do so within the next seven years without continuing to accumulate assets. The minimum investment time horizon is five years. For UK clients we offer a sterling portfolio option.

Who the service is not suitable for? The service is not deemed suitable for investors that have no ability to sustain a capital loss, those with an investment time horizon of less than five years, or those that do not plan to withdraw income from their portfolio in the next seven years.

Costs The costs and charges for this service can be found in personalised client investment proposals. For standard costs based on the minimum investment amount, please refer to our fee schedule. Please note this service is provided on a flat fee basis only.

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Managed Portfolio Service (MPS) in Brooks Macdonald Nominee This service is designed for clients that wish to benefit from the expertise of a team of centrally manged discretionary fund managers. It utilises our Central Investment Process to meet investors’ objectives and needs, as described below. We only offer this service on a discretionary basis, which means that a centrally managed team will make investment decisions on your client’s behalf, using their expertise and knowledge. As such, the portfolio may contain both complex and non-complex products. This service has been deemed potentially suitable for the following target market: 1. Types of investor: The service has a minimum investment amount of £20,000. We provide services on the basis that clients are Retail Clients for the purposes of the FCA Rules. 2. Client’s knowledge and experience: The service is suitable for clients who have limited knowledge and experience of investments, those with previous knowledge and experience of investments, and active investors. 3. The client’s capacity for loss and ability to withstand loss: The service offers no capital guarantees and clients must have an ability to sustain capital loss. 4. The risk/reward profile of the service: The service offers a range of up to 10 investment strategy models. The client’s professional adviser will determine which model is suitable for the client, based on their risk profile. 5. The type of financial needs and objectives of the client This service offers both growth, income and income & growth objectives. The minimum investment time horizon is three years for clients with a “low” risk level, and five years for all others. For UK clients, we offer a sterling portfolio option.

Who the service is not suitable for? The service is not deemed suitable for investors that have no ability to sustain a capital loss, or those with an investment time horizon of less than three years.

Costs For standard costs based on the minimum investment amount, please refer to the costs brochure on our website.

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Managed Portfolio Service (MPS) on Platforms This service is designed for clients that wish to benefit from the expertise of a team of centrally managed discretionary fund managers. It utilises our Central Investment Process to meet investors’ objectives and needs, as described below. This is a discretionary service which means that a centrally managed team will make investment decisions on your client’s behalf, using their expertise and knowledge. As such, the portfolio may contain both complex and non-complex products. This service has been deemed potentially suitable for the following target market: 1. Types of investor: We provide services on the basis that clients are Retail Clients for the purposes of the FCA Rules. 2. Client’s knowledge and experience: The service is suitable for clients who have limited knowledge and experience of investments, those with previous knowledge and experience of investments, and active investors. 3. The client’s capacity for loss and ability to withstand loss: The service offers no capital guarantees and clients must have an ability to sustain capital loss. 4. The risk/reward profile of the service: The service offers a range of up to 10 investment strategy models. The client’s professional adviser will determine which model is suitable for the client, based on their risk profile. The number of investment strategies may vary per platform. 5. The type of financial needs and objectives of the client This service offers both growth, income and income & growth objectives. The minimum investment time horizon is three years for clients with a “low” risk level, and five years for all others. For UK clients, we offer a sterling portfolio option.

Who the service is not suitable for? The service is not deemed suitable for investors that have no ability to sustain a capital loss, or those with an investment time horizon of less than three years.

Costs Please refer to your platform of choice for information on costs and charges.

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Responsible Investment Service (RIS): Advance Strategy on Platforms The RIS Advance Strategy is designed for clients with the dual objective of Responsible Investment and return generation, in line with defined risk profiles. The service invests in collective investment schemes that advance businesses which provide solutions to sustainability issues, or have strong corporate policies and outputs relating to Environmental, Social and Governance (ESG) criteria. The focus is on identifying and investing in businesses that are working towards a more sustainable future. The service is integrated into our centralised investment process and additional stages are incorporated to assess both the fundamental investment rationale for including an investment and its alignment with the values-based criteria. Our research considers funds that use a variety of different approaches to responsible investment, including Impact, Thematic, ESG best in class, ESG integration and Exclusionary screening. Similarly, the service invests in funds that address a range of sustainability issues, some examples of those that may be considered are set out below. • Environmental: Water, waste, plastic pollution, deforestation, biodiversity, toxic emissions, clean energy,

carbon footprint, decarbonization, transition economy and energy efficiency.

• Social: Working conditions, health & safety, equal opportunities, labour relations, collective bargaining, modern slavery, child labour, supply chain issues, inequality, lack of access to resources, land rights, food & nutrition, data privacy and community relations.

• Governance: Anti-bribery & corruption, audit issues, board balance, board diversity, remuneration, business

ethics, director independence, shareholder rights, accountability, cyber security and tax. This is a discretionary service which means that an investment manager will make investment decisions on your client’s behalf, using their expertise and knowledge. This service has been deemed potentially suitable for the following target market: 1. Types of investor: We provide services on the basis that clients are Retail Clients for the purposes of the FCA Rules. 2. Client’s knowledge and experience: The service is suitable for clients who have limited knowledge and experience of investments, those with previous knowledge and experience of investments, and active investors. 3. The client’s capacity for loss and ability to withstand loss: The service offers no capital guarantees and clients must have an ability to sustain capital loss. 4. The risk/reward profile of the service:

This service offers four risk profiles. These are Low-to-Medium risk, Medium risk and Medium-to-High risk. 5. The type of non-financial needs and objectives of the client: The service is targeted at clients who want to support broad sustainability goals, that is businesses that either specifically seek to provide solutions to sustainability issues, or businesses that have strong corporate policies and outputs relating to environmental, social and governance criteria.

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6. The type of non-financial needs and objectives of the client: This service offers both growth and income objectives. The minimum investment time horizon is five years. For UK clients, we offer a sterling portfolio option.

Who the service is not suitable for? The service is not deemed suitable for investors that have no ability to sustain a capital loss, low risk investors or those with an investment time horizon of less than five years. The service may not be suitable for clients that are interested in addressing very specific environmental, social or governance issues, and therefore are not aligned to supporting broad sustainability goals.

Costs Please refer to your platform of choice for information on costs and charges.

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Important information

This document is provided for use exclusively by professional advisers and no part of this document may be reproduced in any manner without prior permission. Any information provided in this document is current only as at the date of publication and Brooks Macdonald Asset Management Limited has no obligation to update or supplement any of the answers given. While the information in this document has been prepared carefully, Brooks Macdonald Asset Management Limited gives no warranty as to the accuracy or completeness of the information. The price of investments and the income from them can go down as well as up and that neither is guaranteed. Past performance is not a reliable indicator of future results. Investors may not get back the amount invested. Changes in rates of exchange may have an adverse affect on the value, price or income of an investment. Investors should be aware of the additional risks associated with funds investing in emerging or developing markets. Tax treatment depends on individual circumstances and may be subject to change in the future. Brooks Macdonald does not provide tax advice and independent professional advice should be sought. The information in this document does not constitute advice or a recommendation and investment decisions should not be made on the basis of it. This document is for the information of the recipient only and should not be reproduced, copied or made available to others. Brooks Macdonald is a trading name of Brooks Macdonald Group plc used by various companies in the Brooks Macdonald group of companies. Brooks Macdonald Asset Management Limited is authorised and regulated by the Financial Conduct Authority. Registered in England No 3417519. Company Registered Office: 21 Lombard Street, London EC3V 9AH. Brooks Macdonald Group plc, its subsidiaries and / or their officers, directors and employees may also own and trade in the underlying assets.