Creating risk-graded investment solutions
A risk-based framework for designing and monitoring retail investment solutions
For retail investors, the market distress of 2008 resulted in savings outcomes which fell very well short of expectations. Customers who were sold well-diversified “Cautious” or “Balanced” portfolios experienced significant losses.
The fallout for suppliers of investment products extends far beyond those cases that have resulted in claims. Globally, there is increasing pressure from regulators to ensure retail investment solutions are suitable for the customer’s risk profile and financial needs. Relying on a client’s attitude to risk or broadly defined fund sectors is no longer sufficient - firms are expected to verify that the customer is able to sustain potential losses associated with the recommended investment.
- For advisors and distribution platforms, this means being able to offer risk-graded investment solutions with well-defined risk characteristics, which can be mapped explicitly to client needs
- For manufacturers, this means designing products or funds which can be integrated easily into the risk-grading framework of different advice processes and distribution platforms
Our Solution
Barrie & Hibbert’s suite of Investment Governance Services allows advisors and other distribution platforms to put in place a robust and objective risk-graded investment proposition, aligned with stringent new regulation, and configured to their own business needs and competitive position. This same framework allows manufacturers to create products which match defined risk targets and financial needs, and to integrate these into a range of advice and distribution platforms.
Benefits
| Objectivity & Transparency | Clear demonstration that your proposition complies with regulatory guidance. Full documentation of all our modelling assumptions and access to our modelling services desk. |
| Independence | By using the market-leading risk modelling specialist, you are in a stronger position to demonstrate the validity of your products and the strength of your governance and investment suitability process. |
| Competitive Differentiation | Demonstrating a “best-practice” approach to product design and investment governance provides a clear competitive differentiator. |
| Business Retention | Enhance the quality of product sales, increase the likelihood of meeting customer expectations, improve business retention. |
| Consistency | Develop a risk-grading framework which covers the full range of investment, pension saving, and retirement income products, providing a consistent framework for design, governance and communication across different channels and products. |
