Independent dealer group Futuro Financial Services has introduced an alternative portfolio construction fund to its advisory network which aims to reduce risks.
The strategic risk allocation (SRA) fund will sit alongside the standard strategic asset allocation approach and can be accessed through Sterling, the group's recently launched managed account service, along with a number of other wrap platforms.
The multi-manager, multi-asset class fund will be managed by Investment Science Asset Management.
"It offers our advisers and their clients a truly unique and attractive opportunity to invest in a product that has a strong point of difference to traditional diversified funds," Futuro director network services Paul Kelly said.
"It offers three basic portfolio options for conservative, balanced and growth-orientated investors that we are calling SRA-4, SRA-9 and SRA-16. By blending the three options, however, advisers can create custom portfolios to match specific risk profiles of individual investors."
Futuro has partnered with Target Risk Funds to provide training and education for its advisers to enable them to clearly communicate the benefits of the new fund to their clients and to assist with any implementation and integration issues.
SRA, also called risk targeting, was pioneered in the US by the Yale and Harvard university endowment funds.
Different forms of the approach are used around the world, including by some large Australian superannuation funds such as Queensland Investment Corporation, Victorian Funds Management Corporation and Funds SA.
However, the approach is not commonly available to financial planners or to retail investors.
"The approach stood up exceptionally well prior to and throughout the global financial crisis and continues to do so. It represents a genuine departure from mainstream thinking and mainstream portfolios, which many clients have felt let down by in recent times," Kelly said.
"We recognise that our clients don't get a second chance to invest for life and as fiduciary duty moves to becoming law, we feel we have a responsibility to bring evolved approaches to the table."
