Stress test your fund manager, advisers warned
Financial advisers need to apply three stress tests to any funds management offering in order to ensure it is in the client’s best interests, according to Pengana Capital.
In a statement issued yesterday, Pengana head of distribution Damian Crowley said the first test advisers should apply is “correlations to the equities markets and to the other major asset classes including bonds and listed property”.
Second, advisers should separate returns from funds into ‘alpha’ and ‘beta’ segments to establish how much is skill-based or market-based.
Third, the fund manager advises asking whether the fund is truly ‘benchmark-aware’. “The benchmarks capture everything, so they’re reflecting current market capitalisation, not necessarily the best investment opportunities at that time or quality and value metrics,” Mr Crowley said.
What is the value of an adviser?
A new report has dived into the value of advisers and found that they deliver va...
Expect industry overhaul: FPA
Financial planning is set to have a revamp, the Financial Planning Association o...
Industry needs to speak the language of women
The adviser industry still has work to do in finding a way to speak the language...