Investment planner helps advisers create investment strategies for their clients. It is a risk profiling, asset allocation and fund selection tool, so that advisers selecting funds through the company’s life and pension wrappers do not need to use a separate tool for each purpose.
Canada Life has analysed client information entered into Investment Planner by advisers and has designed four fund of funds to match the asset allocation of risk profiles four to seven.
The reserved portfolio matches risk profile four, the cautious portfolio fits risk profile five, the strategic portfolio suits risk profile six and the growth portfolio is in line with risk profile seven.
All funds will invest globally in equities, UK fixed interest and UK commercial property mainly through internally managed funds, to keep costs to a minimum. Externally managed funds may be used where necessary and at launch, BlackRock emerging markets is the only example of this. It is held in the cautious, strategic and growth portfolios.
These funds could be useful to IFAs who use Canada Life’s investment planner tools as it means they do not have to spend time looking for funds to match the asset allocation suggested for the clients by the investment planner tool. Another benefit is that the portfolios are automatically rebalanced to ensure that any changes that occur as the underlying investments rise or fall are brought back in line with the original asset allocation. This should make the job of managing client portfolios quicker and easier for advisers.
Costs will be lower than a completely unfettered fund and the portfolios do have the flexibility to use external funds if specialist investment skills are needed. However, internal funds will provide the bulk of the portfolios and as it is difficult for one investment group to excel in all regions and asset classes, the portfolios may be too restrictive for some investors.