Following the launch of its financial product ratings tools, Lonsec has added four Better Investment Outcomes (BIO) metrics to help advisers assess whether a product meets a client’s needs.
Having launched its suite of financial ratings tools in April 2015, the research house has now added three fee BIOmetrics and an ESG BIOmetric, aiming to assist advisers in achieving better investment outcomes for their clients.
Lonsec Fiscal Group joint chief executive Amanda Gillespie said that with rising negative consumer perception, financial product advice must now be better and the research to support that product advice must also shift.
Ms Gillespie said there has “never been a time when fees have come under greater scrutiny” and that this trend shows “no sign of abating”.
“In current industry fee reporting, fees are reported on a lagged historical basis and are not expressed relative to return or to competing alternative options,” she said.
“By providing a forward looking view that compares like products, lower fees should no longer be used as a sole justification for product recommendations."
Commenting on the addition of the ESG BIOmetric, Ms Gillespie said ESG awareness is no longer just a values-based consideration when it comes to product recommendations.
“ESG investing also aims to improve investment performance. There is growing evidence showing that incorporation of ESG factors into the investment process may offer investors potential performance advantages,” Ms Gillespie said.
“Our ESG BIOmetric sees Lonsec bring institutional quality ESG assessment to retail investments for the first time.”
To date, Lonsec has launched six BIOmetrics: Complexity, Standard Risk Measure, ESG Awareness and three Fee BIOmetrics.
A further six BIOmetrics, covering financial product risk, return and features, will be launched during the second half of 2015.
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