F&C is introducing four lifestyle funds of funds that will combine the multi-manager skills of Richard Philbin and his team with a risk-profiling tool created by Distribution Technology.
The dynamic planner tool will determine the asset allocation for the F&C lifestyle growth, lifestyle balanced, lifestyle cautious and lifestyle defensive funds.
Each of the portfolios will be tailored to fit the risk and return preferences of a certain type of investor and will be rebalanced quarterly to ensure it does not deviate from its risk profile.
F&C’s multi-manager team will select the most appropriate funds to fit each portfolio using the same process as the existing multi-manager funds.
According to F&C, lifestyle funds are popular in the US and could gain more prominence in the UK, partly because regulatory requirements mean advisers must ensure clients’ investment portfolios stay within their risk profiles.
The company also feels that investors are starting to prefer investment solutions rather than simply buying a product.
The launch of the lifestyle funds is supported by distribution deals including an arrangement with Paradigm, the new adviser platform set up by former Bankhall chief executive Paul Hogarth.
Minimum investment is £5,000 while charges and commission are in line with the existing multi-manager range.
Head of global retail Nick Criticos says: “What we are doing is building on the company’s multi-manager capability. We have been talking to IFAs and decided to link the risk-profiling software advisers use during their fact-finds to the type of fund or managed product they could put their clients into.
“The multi-manager team will be using same techniques to screen the most appropriate funds for each risk profile. There is some commonality in the underlying funds of the existing multi-manager funds and we are expecting the same sort of overlap in the lifestyle funds.”