Life-cycle strategies are a simplistic way of addressing risk, according to fund managers.

The products are generally based on a model under which asset allocation is gradually shifted from growth assets to defensive assets as an investor approaches retirement, or as the use of capital protection increases.

A number of superannuation funds have been exploring these strategies in the wake of the global financial crisis, but fund managers consider this to be a poor way of mitigating investment risks.

"It would appear to be quite a simplistic thing to have life-cycle age brackets and growth and defensive levels proscriptive at each time for every single person," BlackRock director Vincent Lo Blanco said.

"I think in the experience of Australia, in many respects the individual risk profile of the investor and where they are in their life tends to be outsourced to financial advisers.

"In a perfect world, you go back and see your financial adviser every time your circumstances have changed. You now have a large mortgage, you've got kids on the way, you've got all of those sorts of issues where your risk parameters can change.

"Ultimately, life-cycle makes sense - you start risk hungry and you end up less risk hungry. But how you map that out and build that into the portfolio is a matter of understanding which [parameters] you need to adjust to meet the risk profile of the client."

Schroders head of fixed income and multi assets Simon Doyle said life-cycle strategies were not only simplistic, but they were also based on the wrong assumptions.

"What is declining is your equity exposure in your portfolio, but not your risk," Doyle said.

He argued the products assumed risk was synonymous with equity volatility, but said volatility was a poor measure of risk because it usually declined as prices of risky assets rose.

Volatility is usually at its lowest level in the later phases of a bull market when valuations are at their most extreme.

Instead, risk should by measured through the embedded risk premiums in the market, which were constantly changing and had nothing to do with someone's age, Doyle argued.

"It just comes back to ignoring the fundamental problem, which is that fixed asset allocation doesn't really work," he said.

Some life-cycle products do not change the balance between growth and defensive assets, but build up capital protection as the investor gets older.

Lo Blanco said the shift of risk to the investor under the Australian defined contributions system had created a natural demand for investors to reduce their risk.

But he warned that could be taken too far.

"If you go back to mitigating all of that risk, you are going to end up eating significantly into your returns," he said.

This would be magnified by the fact companies that provide capital protections have to take the liabilities on their balance sheets and, as capital is currently expensive, this would result in high fees.