Why adopt a Risk Target Managed approach?
Why Risk Target Managed?
Ensuring ongoing suitability is a significant challenge for advisers, particularly where they have an ongoing duty of care to their client.
Funds and portfolios may drift over time and become unsuitable for the client, which is why a regular review is required.
Whilst this asset manager commitment is delivered on a best endeavours basis, the Dynamic Planner Risk Target Managed service offers the financial planner a choice of volatility managed, multi-asset investment solutions that fit within their centralised investment process for certain client segments.
A Risk Target Managed investment is one that is designed with reference to a specific Dynamic Planner risk profile, its risk boundaries and/or asset allocation.
To be considered as a Dynamic Planner Risk Target Managed investment, the asset manager has to agree to run the fund or portfolio and commit to the following:
1.Expected volatility is targeted to stay within the boundaries assigned to each Dynamic Planner risk profile; and/or
2.Targets the strategic asset allocations for the respective Dynamic Planner risk profile;
3.Offer suitably diversified exposure (either directly or synthetically) to at least 6 asset classes included within the respective Dynamic Planner strategic asset allocations;
4.The underlying asset class exposure is managed in a suitably diversified manner;
5.Derivative exposure is managed in the main for the purposes of efficient portfolio management whilst use of any other strategies may be considered and accepted/rejected by Distribution Technology.