Advisers rate the ability to keep a tight grip on risk above maximising returns when recommending funds to clients, Skandia research suggests.
In a survey of 1,428 financial advisers, 80% said maintaining a portfolio in line with an investor's risk appetite is of paramount importance to them.
Skandia says the results show investors are becoming savvier to risk and risk management, which it says has lead to a rise in the popularity of risk-rated funds.
Head of investment marketing at Skandia UK Graham Bentley says: "People are now more switched on than ever about investment risk.
"Many investors are now no longer just focusing on the potential returns offered by their investments but on the potential losses and managing this appetite for risk has become paramount," he adds.
Risk-rated funds are designed to make sure clients' portfolios stay within their desired volatility targets.
Of those polled, 35% cite keeping the volatility of their fund more closely aligned to the client's risk appetite as the most important benefit of risk-rated funds.
A third (31%) said the fact risk-rated funds are aligned to the risk profiling process is their key benefit, and a fifth (22%) feel it is because they help advisers explain investment risk more easily to clients.
More than a third of advisers (39%) believe their use of risk-rated funds will increase over the next 12 months, with 3% expecting their use to decrease.
A significant majority (73%) of advisers believe risk-rated funds allow them to better manage their client's expectations.
Bentley adds: "As long as the funds perform in line with their volatility targets there should be no surprises for the investor."
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