Aegon has added additional risk profiles to its Core portfolio range of funds to help advisers gauge the appropriateness of products for their clients.
The company announced today (January 23) that it has added risk profiles from Synaptic, Defaqto and FinaMetrica, alongside existing ratings from Distribution Technology, to the range.
Nick Dixon, investment director at Aegon, said: "We are committed to supporting advisers and their clients make informed decisions about their investments. The new ratings make it easy for advisers to use Aegon funds as part of their investment process."
Aegon’s Core portfolios, with £2bn in assets, consist of a range of seven risk-managed multi-asset funds delivering long-term growth.
The new risk ratings will inform adviser assessment of their clients’ individual attitude to risk, in order to match them to a fund that best suits their investment timescale and life stage, the company said.
Alistair Cunningham, chartered financial planner at Wingate Financial Planning, said the move would be helpful for advisers trying to match up clients’ risk appetite with products.
Mr Cunningham said: "It is notoriously difficult to map the output of a risk management tool with how a fund is managed.
"We, as a firm, use the same tool to build our own funds as we do to asses our client’s risk appetite. With third parties, there is usually a different set of assumptions."
The regulator has previously warned about what it called the "shoehorning" of clients, which means matching a risk-rated client with a fund of the same risk number without checking if they actually corresponded.
Mr Cunningham said the move by Aegon could help advisers use the same 'language' when assessing client needs and the risk profile of a fund.
But it should still only be used as a guide," he cautioned. "It is ultimately the adviser’s responsibility to help clients choose a suitable fund," he said.
Aegon’s Core portfolio range incorporates seven portfolios that look to provide investors with long-term capital growth.
The funds offer risk-return profiles to match different investors’ objectives with each portfolio investing in a diversified mix of assets appropriate to its risk rating.
The portfolios are funds of funds and are built mainly using passive funds.
