The regulator's decision to place the onus on ensuring investments always remain suitable squarely in the hands of individual advisers is a big reason behind the growth of risk-targeted funds, argues Andrew Morris
In How important are risk ratings?, we looked at the subtle, yet important, differences between funds that were risk-profiled and those that were risk-targeted. This time, let's delve deeper into this area and examine the growth of the risk-rated space over the last five years. This is important as, in July 2012, the then Financial Services Authority (FSA - now FCA) introduced its guidance on assessing suitability. Specifically, this put the onus on ensuring investments always remained suitable squarely in the hands of individual advisers. So what is meant by suitability? Prior to 201...
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