Long-time proponent of risk targeted investments Rathbones' chief executive Mike Webb has said the method makes fund managers work harder for investors, and can help advisers stay on the right side of the Financial Conduct Authority (FCA).
Risk targeted funds' main aim is to only expose investors to a specified, and constant, amount of risk. This compares to risk rated, which assigns a risk number to a fund based on a ‘snapshot' of its potential level of volatility, that is not guaranteed and is liable to change. Research commissioned by Rathbones suggests around a third of advisers are still unsure of the differences between risk rated and risk targeted funds. Webb said he has been lobbying the Investment Management Association (IMA) for three years to create a specific sector for risk targeted funds, so advisers kn...
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