The sales and marketing director for financial planning software provider eValue said using the funds without “thorough research across a client’s entire profile” was “fraught with danger for clients”.
Ms Hall repeated calls made by eValue in 2012 for advisers to ensure they undertake their own due diligence when recommending risk-rated funds.
However recent statements from the FCA suggested that proper due diligence was still not being undertaken.
Last month Rory Percival, technical specialist for the FCA, said that the regulator was concerned about adviser due diligence on investments and added that risk-rated funds could not be used as a shortcut to determine client suitability.
Ms Hall said: “One of the biggest issues advisers face is matching their client’s risk profile with suitable funds and the FCA is absolutely right to raise concerns about the use of risk-rated funds.
“The riskiness of a fund depends on term and variability in risk is not same for all funds.”
Nick Lincoln, director of Hertfordshire-based Values to Vision Financial Planning, said: “I don’t use risk-rated funds but if I were to I would ensure that I looked under the bonnet at the underlying structure. Just because something is in a cautious sector does not mean it should be there.”