The advent of the RDR has been one of the drivers behind the adoption of more risk-targeted strategies among advisers and their clients, although Mr Ventre believes that it is not simply an outcome of regulation.
He says: “Yes, the regulator made this a key part of RDR but they were right to do that. This isn’t something the industry should be dragged kicking and screaming into – it’s something that’s actually good for clients.
“The industry was generally moving that way anyway and it was, of course, accelerated by the RDR.”
Ellie Duncan is deputy features editor at Investment Adviser
KEY DIFFERENCES
John Ventre, head of multi-manager at Old Mutual Global Investors, says:
“The key difference between risk-targeted and risk-rated [funds] is what behaviour is actually going on with the fund manager.
“So a risk-targeted strategy typically involves the manager managing that strategy – having the risk profile of the client and managing to that; whereas a risk-rated strategy is really about an external party looking at the management style of a particular fund or manager and giving it a risk rating that may have little or nothing to do with how the fund is actually managed day-to-day.”
