Capita Financial Software has launched a risk rating tool which allows advisers to use forward-looking analysis to see how underlying assets are likely to perform over time.
The Synaptic Risk Ratings service, backed by economic modelling from Moody’s Analytics, uses a probability-based risk measure to project possible outcomes from an investment so that advisers can discuss what percentage of a client’s portfolio could be gained or lost over a certain time period.
It will be free to existing Synaptic and Client Care Desktop users, and is available on a six-month free trial basis to other advisers.
Capita Financial Software managing director Adam Byford says: “It is impossible for advisers to rely on the inconsistent labels funds are given, such as cautious or balanced, to meet client risk appetites. Current risk rating services are a useful measure, but often mean advice is given on a non-objective basis.
“Advisers can now measure the probability of what is likely to happen to an investment over the long-term, with our forward-looking analysis of the underlying assets.
Separately, support services firm SimplyBiz has also decided to renew its Synaptic contract with Capita for a further five years following a one year trial.
Evolve Financial Planning director Jason Witcombe says: “The risk information on disclosure documents can be misleading so a forward-looking tool does sound interesting.”