The Investment Management Association’s (IMA’s) proposal to base fund comparisons on risk data is too restrictive, according to Skandia.
Skandia has described the development as positive but has voiced concerns over whether investors will be able to accurately determine if a fund’s risk level matches their own, under current proposals.
Ryan Hughes, a portfolio manager at Skandia, comments: “The IMA has rightly identified that investors are increasingly focusing on risk when comparing investment funds.
“This is a positive development and we are keen to work with the IMA to help identify a methodology that could help investors accurately understand what the risk levels of managed funds are and whether they are right for their individual needs.”
The synthetic risk reward indicators (SRRI) – the basis of risk data comparisons under the current proposals – are “too broad” and the IMA should instead consider risk profiling tools already in use by investors and financial advisers, Skandia says in a statement today.
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