InvestmentsNov 28 2019

Dynamic Planner launches risk-based benchmarks

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Dynamic Planner launches risk-based benchmarks

Risk profiler Dynamic Planner has launched a series of 10 risk-targeted benchmarks to help advisers compare the performance of portfolios for the risk they are taking.

The company has teamed up with MSCI to launch the MSCI Multi-Asset Indexes - Dynamic Planner Module which will be available through the Dynamic Planner financial planing system.

The benchmarks are based on a set of model portfolios optimised for 10 risk levels, developed with Dynamic Planner's asset and risk model.

Ben Goss, the chief executive of Dynamic Planner, said: "Over the last two years the FCA’s Asset Management Market Study has brought to the fore the importance of demonstrating returns for the risk taken by the investor.

"Until now there has not been a credible way in which to show this. We have worked with MSCI to fill this void and deliver this suite of independent risk-targeted benchmarks to UK advice firms and investors.

"Currently fund managers can choose and select their own benchmark from thousands of options. The problem with this for investors is that it makes it almost impossible for funds to be compared fairly on a like for like basis.

"The Dynamic Planner Indexes overlay a consistent framework that can be used to really get under the bonnet of a fund, properly understand its risk profile."

Dynamic Planner, which claims to be one of the most widely used risk-based financial planning systems in the UK, said the benchmarks would track the underlying performance of its asset and risk model going back to September 30 2005.

Each index is comprised of replicable sub-component indexes targeting various exposures to equities and bonds and property to reflect the holdings of a diversified multi-asset class strategy.

Steven Kowal, head of wealth index products EMEA at MSCI, said: "There has been a longstanding demand in the wealth marketplace for multi-asset class indexes that can serve as benchmarks for portfolios that are primarily risk-targeted rather than return-targeted.

"Sector and other peer-group averages can provide general guidance but can be too broad and not replicable.

"MSCI’s collaboration with Dynamic Planner, a recognised leader in fund risk profiling for the UK wealth community, aims to fill this void by offering these independent, daily indexes."