City Financial unveils Adviser Centre fund ratings service

Ex-OBSR fund research chiefs Peter Toogood and Gill Hutchison are aiming to unearth new fund manager talent with their new free online service, The Adviser Centre, which has gone live this week.

The duo set the service up after joining City Financial last year, and have so far reviewed 117 funds on The Adviser Centre’s three lists.

These include 89 “recommended” funds and 21 “established” funds - products which are closed or nearing closure. There are also seven “positive watch” funds - newer portfolios which do not have a long track record but which Mr Toogood and Ms Hutchison believe to be future candidates for the “recommended” list.

Mr Toogood said some of the larger funds on The Adviser Centre’s list were “vulnerable” to managers leaving, and added: “Where is the new talent coming through?”

“One of the reasons we did this was to find the talent coming through,” he said. “It’s recognised by Morningstar, Square Mile and other research groups that the recommendations mean there is a concentrated asset base and we need to diversify.”

He gave the example of Standard Life Investments’ successful Global Absolute Return Strategies (Gars) fund, which is on The Adviser Centre’s “established” list of funds at or near capacity. Mr Toogood highlighted the need for advisers to be able to access information on similar products being developed by Aviva Investors, where Gars architect Euan Munro is now chief executive, and Invesco Perpetual, whose Global Targeted Returns fund is on The Adviser Centre’s “positive watch” list for newer products.

The Adviser Centre produces its own one-page factsheets on each fund it reviews, giving a detailed breakdown of factual information, the product’s objective, its management team and its process.

The factsheets also contain The Adviser Centre’s own views of the fund’s processes and performance, as well as providing context for each fund’s risk level as measured by the synthetic risk reward indicator, or SRRI, a risk measure introduced by European regulators two years ago.

“The RDR means if you are independent then you have to prove to the FCA you are well resourced,” Mr Toogood said.

“In the old days we would be very factual and give numbers. Here what we’ve done is talk about when and how to use funds, the nature of them, where they fit in portfolios, what they would complement and what they will do in different environments.”

City Financial is “heavily subsidising” the service, he added, but The Adviser Centre will also be seeking contributions from fund management firms when it reviews their funds. However, Mr Toogood emphasised that any payments would not influence their fund selection.