7IM model portfolios and funds to be risk rated by Oxford Risk

by | Jul 15, 2022

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Following growing adviser demand, 7IM has partnered with Oxford Risk to have its portfolios risk rated. Advisers who use Oxford Risk’s ‘Investor Compass’ tool can now access 7IM’s model portfolios and funds via the firm’s innovative end-to-end risk profiling and suitability solution. 

Model portfolios rated by Oxford Risk include 7IM’s Responsible Choice, Active, Blended and Passive ranges. Oxford Risk has also rated 7IM’s funds, including its Pathbuilder, AAP, and Multi-Manager ranges, as well as the Sustainable Balance Fund, and Personal Injury Fund

Oxford Risk uses a unique methodology to determine the suitable risk level for each investor, built on advanced behavioural finance techniques to identify an investor’s willingness and ability – both financial and emotional – to take risk. This includes identifying what returns are realistic for each risk level, as well as the emotional reactions an investor is likely to experience to any potential losses.

Their portfolio rating assesses the long-term prospects of investments based on extensive historical asset data but without assuming the future will replicate the past, and includes the potential for momentum and mean-reversion, the absence of which could affect the projections.

This approach grants advisers the ability to gain a much deeper understanding of their client’s needs and therefore align them to the most appropriate investment vehicle.

Commenting on the announcement, Verona Kenny, Managing Director, 7IM Intermediary said: “We are delighted to be working with Oxford Risk, many advisers use its Investor Compass risk tool and fed back that adding its risk ratings on our models and funds would be hugely helpful.

“The way in which Oxford Risk puts an emphasis on the behaviour of the client to complement the financial statistics to them create a risk profile resonates with our own values that put clients and their needs first.”

Dr Greg Davies, Head of Behavioural Finance at Oxford Risk said: “We are delighted to be able to provide risk ratings on 7IM’s funds and model portfolios. We know that many advisers that use 7IM also use our Investor Compass, so it made perfect sense to partner with the firm.

“One of the unique elements of our process is our focus on understand the behaviour of clients when it comes to risk and returns, something which 7IM identified as aligned to its own views on helping advisers make more appropriate decisions for their clients.”

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