MARKETS & INVESTING spoken aloud was dissected to decide if the tone was dovish or hawkish , with many trying to find glimpses of positivity to work from , hoping the dial hadn ’ t been turned enough to break the world as we know it . It wasn ’ t an easy year to be an adviser . Good news everyone – we can now shake off 2023 and look ahead . Now with our target market segmentation , our robust and repeatable hats on , our foundations are set to get back to doing what we enjoy most – helping clients . This year promises to be an exciting year , not without its risk mind you , but exciting none the less .
What now for cash ? Throughout 2022 and 2023 we saw the rise of clients seeking shelter in cash , some without the understanding that while + 4 % seems attractive , in real terms many were still losing out on purchasing power . Subsequently , they lost out on what was a volatile but broadly fruitful year for fund performance . As things are seemingly going , 2024 could be the year where this cash gets set to deploy itself into the market . The natural next question for clients will be : “ what do I do with this cash now ?” Some clients , those that are still building their wealth , are happy to take on volatility with the caveat that they are rewarded handsomely for the risk they take . However , most clients rely heavily on advisers to make sure that their risk appetite is matched with a fund that is appropriate . They also expect their funds to stay at the same risk level year on year . As we have all experienced , this isn ’ t always the case . With volatility increasing over the past couple of years , I ’ m sure many of you have walked into an annual review with a client to find that the risk profile 4 fund that you had originally recommended has somehow started looking like a risk profile 5 , 6 or even a 7 . It ’ s not a pleasant surprise .
An antidote to uncomfortable conversations As this cash is deployed , there is an option to consider within SimplyBiz . The Risk Controlled range of funds is the antidote to some uncomfortable client conversation . With an independent Investment Committee reviewing the asset allocations of partner firms , creating reports that are easy to use , backed by data and open in sharing thoughts and market assumptions , choosing funds that have been scrutinised and reviewed is easier now than it has been previously . The goal of the Risk Controlled range is to offer a condensed list of market-leading funds from marketleading investment managers that have agreed to be consciously aware of ( and even wholly adopting ) an SAA that is optimised for risk vs return by risk profile . This means that on a quarterly basis you have a team that is reviewing and discussing the funds you are using , holding the fund managers accountable for the choices they are making within the portfolios , and looking to ensure that your client ’ s risk profile 4 fund stays at risk profile 4 throughout the year .
Towards goal-based retirement advice The upcoming RITR could see some shift towards a new way of advising those clients in or at retirement . The RITR shows the focus of the FCA is on ensuring there is a difference in approach and investment choice for those clients that are in or at retirement . Since the adoption of pension freedoms , we have seen PROD and Consumer Duty which have made it clear that goals and objectives should be the focus , not necessarily just outright performance . This has also informed the thinking with our Risk Controlled service , where we have retirement-income-specific investment solutions which are designed to cater to those goals and reviewed by the SimplyBiz investment Committee with the aim of making the choice easier for those who would like to have peace of mind . Please do get in touch with me if you ’ d like to understand this more .
Green labels The new ESG labels will start to make an appearance in the second half of the year , thankfully , making life easier for those clients that do feel so inclined . The introduction of the fourth category , Sustainability Mixed Goals , is a welcomed addition , potentially allowing more choice for those clients that do want an ESG tilt , but perhaps aren ’ t ready to commit to impact investing . Over the first half of the year , we are sure to hear from investment managers about how they will look to adopt these labels , and their reasons for doing so . We will be working closely with leading investment managers on bringing advisers the most up-to-date information to keep you in the loop as the adoption of the labels gains traction . Our fantastic compliance team will also be on hand to help understand where this fits in the advice process , and if in future we will need to make changes to the conversations with clients to satisfy ESG requirements . 2024 looks like it will be a year of change . Change in process , change in appetites , maybe even a change in governments . We are here to support you as these changes take place .
You can learn more about Risk Controlled via the Compliance > Research section of our websites .
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