Tom Caddick, LV= Asset Management’s head of multi-manager and fund selection, talks about the strengths and benefits of the firm’s four-strong Managed Portfolio.
Investment Adviser
Providing solutions to advisers deciding where best to place their clients is the goal of the four-strong LV=
Managed Portfolio range, according to Tom Caddick, LV= Asset Management’s head of multimanager and fund selection. “Faced with increasing regulation, the need to demonstrate TCF and the looming RDR, advisers are already under huge pressure,” says Mr Caddick. “Add to that the difficulty of keeping on top of recommended client portfolios amid market volatility, and the picture just gets worse. “The LV= Managed Portfolio range addresses a number of these issues.”
The quartet of funds, launched last July, aims to help bridge the gap advisers face between determining their clients’ risk attitude and recommending appropriate vehicles to meet their needs. “We are keen to provide real solutions rather than just sell products,” Mr Caddick insists. “These funds give a structured framework that enables advisers to match their clients’ attitude to risk to the corresponding portfolio in our range.”
All the funds in the range – which are LV= Managed Portfolios 4, 5, 6 and 7 aim to deliver long-term capital growth, with exposure to asset classes varying according to the different risk profiles. The starting point is Dynamic Planner, the client risk profiling tool that is used by more than 18,000 UK advisers to ascertain their clients’ risk appetite. It provides an objective and consistent framework by asking them a series of questions.
“They are quite wide ranging, and advisers have the option to select the number of questions they wish to ask in order to build up a profile of their client and their attitude towards risk,” explains Mr Caddick.
Using a sophisticated modelling process, the client’s answers result in his or her risk profile. The tool determines the ideal asset allocation of the portfolio in which the client should be invested to meet his or her particular appetite for risk, based on an efficient frontier. The whole point of the process is to provide a framework for consistency. “The way in which clients think about risk varies from day to day and, with the best will in the world, three advisers could all agree a client is a cautious investor but then arrive at different conclusions as far as what the portfolio should look like,” he says. “For example, some may justify the inclusion of emerging markets, while others may not. Dynamic Planner provides an objective and consistent way to capture clients’ attitudes and translate them into a meaningful asset allocation.” Once advisers have determined a client’s risk profile, this can be matched to the most suitable LV= Managed Portfolio in the knowledge and understanding that the fund will be managed to that client risk profile.
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