Distribution Technology will examine the volatility, performance, strategic and tactical asset allocations to assess the risk level for investors.
These ratings will then be reviewed quarterly to ensure they remain correctly positioned and balanced.
Nick Rosenblatt, head of Strategic Partnerships for the company, said Russell Investment’s “range of models has been designed to deliver incremental return with incremental risk. Launched three years ago, they now have a track record that demonstrates this.”
Mr Rosenblatt explained that managing risk is vital not only for advisers, but for their investors seeking to build a desired portfolio in line with their “appetite for risk”.
Mark Hoskin, partner for Holden & Partners, said: “On a fund-by-fund basis the way that the FCA currently makes you assess risk is by looking at the volatility of a fund over the past three years. The analysis of risk is historical. [But] there is not a subjective view of risk going forward, looking at the world, where the fund is exposed, and what it will look like tomorrow. So when you are talking about risk in terms of your clients, from our perspective, we talk about a portfolio of investments; we’re not talking about a single fund. So risk labelling a single fund, while useful, is not necessarily the answer for the client.”