S&P launch adds to industry rating congestion
International rating and investment data groupStandard & Poor’s(S&P) today formally launched Australian Fund Management Ratings - a rating and research tool aimed at financial planners and dealer groups.
The offering covers the Australian and global equities sectors, and rates managers (an initial seven have subscribed with managers not paying an upfront fee - a departure from S&P’s global pricing system) on the basis of funds offered in these two sectors.
“Investors, and their advisers, need to look further than past performance to decide whether a fund will consistently meet their needs. We believe our ratings will help financial planners to select funds and substantiate their fund selection to clients,” says S&P fund services director, David Collins.
Of the initial 21 funds rated, two received the highest possible ‘AAA’ rating.
According to S&P managing director Chris Dalton, the increasing retailisation of the market will make the group’s ability to provide information across a range of investments such as hybrids, annuities, and syndicated property loans a key differentiator in the local research market.
“Market feedback indicates there is a significant opportunity for a provider of credible, independent, and truly global research,” Dalton says.
The new rating system assesses past performance as the initial stage in determining a rating. This is expanded with in-depth, interview-based research, with potential funds also undergoing a quantitative screen to determine eligibility for a rating.
Once funds have passed the quantitative performance hurdle, the rating process is 100 per cent qualitative, based on in-depth interviews with the fund manager in question.
Standard & Poor’s has been providing ratings on cash and bond funds in Australia since 1989, and offers fund management ratings on 1,300 funds globally, thus it was a natural step to bring this expertise to Australia, Collins says.
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
