The investment ratings and research agency FE has launched a new investment process aimed at financial advisers. FE Analytics+ Investment Planner includes a new risk profiling tool as well as functionality that enables advisers to map investment solutions to a client’s risk profile and a report generation tool.
In addition to a psychometric attitude to risk questionnaire, the risk profiling tool, which is powered by EValue, also helps advisers understand a client’s capacity for loss and enables them to compare different outcomes in order to confirm the suitability of any chosen risk profile.
The client’s risk profile can then be mapped against any investment portfolio using the new FE Risk Score Bandings system. The Risk Score, according to FE, is an independent measurement applied to the whole of the market.
In a recent review of risk profiling tools the former FCA regulator Rory Percival recommended that advisers ensure they were comfortable with the mapping of investment solutions to client risk categories.
The final stage in the Investment Planner process is a report centre that allows advisers to summarise every part of the process that has led to their recommendation. This includes “possibility of loss” reports that review the inherent risk of each risk grade and “switch reports” that compare the client’s existing portfolio to the recommended portfolio.
According to FE the system is fully customisable and can be tailored to match advisers’ own investment propositions.
FE commercial director Matthew Surfleet said: “Establishing suitability, including discussing the risk a customer is willing and able to take and mapping appropriate investment solutions, is critical for all financial advisers. However, the processes employed to achieve this are often manual, inefficient and can vary, even within the same firm.
“FE Analytics+ Investment Planner has the potential to become the industry standard for delivering consistent advice in one streamlined process. Uniquely, advisers will have the freedom to map any investment solution to the most suitable risk profile.
“This is because the already widely-used FE Risk Score will be used as a measure of the relative riskiness of a portfolio and this is applied to the whole of the market – no provider pays to be rated.”
A survey of advisers by FE last year revealed that nearly 60 per cent did not use technology in support of their centralised investment processes – although almost all highlighted the need for a one-stop solution that could help with researching and selecting investments and investing clients’ money.
Herbert and Webster managing director Adam Herbert is an early user of the system. He said: “The investment planner has given us the solution we have been waiting for, for a long time. It brings all steps and processes together from the attitude to risk questionnaire, capacity for loss, the asset allocation, and risk banding to the investment solution
“It allows us to service all clients with all suitable investment solutions within a single software solution.”
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