advisers guilty of risk profile fudging

Advisers have taken risk off the table across all categories in the past six months, leading to a convergence of cautious, balance and aggressive recommendations, according to FE.

advisers guilty of risk profile fudging


In its latest rebalancing of FE Adviser Fund Indices (AFIs), the firm found the three risk groups had converged closer than in previous assessments.

“We have seen a reversal of the trend which saw advisers reduce their exposure to corporate bonds in the November 2011 rebalancing.

All indices have since seen inflows into this asset class, suggesting that corporate debt is perceived as the nearest thing to a safe haven in these turbulent times,” said Oliver Clarke-Williams, investment product consultant at FE.

Each year the three AFIs – cautious, balanced and aggressive – are calculated by collating fund and asset allocation recommendations from a panel of UK investment advisers.

The indices are rebalanced twice a year and its latest review, effective 1 August, marks their 16th season.

A shift away from emerging markets and other international equities has been recommended by IFAs across all risk profiles and has been particularly evident in the most adventurous, the AFI Aggressive Index, which has reduced exposure to the Asia-Pacific region by 7%.

At the fund level, Axa Framlington UK Select Opportunities was advisers’ top fund pick for aggressive investors and also made it into the top three fund choices for the other indices. Meanwhile M&G Optimal Income was the favourite for both balanced and cautious investors.

The FE AFI panel is comprised of investment-focused advisers from a range of companies, including Rowan Dartington, Charles Stanley, Close Brothers, Chelsea Financial Services, Williams de Broë and Whitechurch Securities.



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