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EV launches ESG-enabled income risk profiler and risk rating service


EV (formally EValue) has launched an ESG-enabled income risk profiler tool for financial advisers. The solution is the first of its kind that maps to a fit-for-purpose income risk rating service for fund and asset managers.

EV has launched an ESG-enabled income risk profiler tool, which it has made available to financial advisers and which it says is the first of its kind that maps directly to its income risk rating service for fund and asset managers.

The new income-focussed questionnaire and risk rating service seeks to support advisers by matching their client’s risk profile more accurately to suitable funds providing sustainable levels of income in retirement. With a new range of decumulation risk-rated funds for advisers to choose from, EV is now working with fund and asset managers to optimise underlying asset allocations, mapping these to suitable fund choices for a client’s capacity for loss in retirement.

Gary Wheeler, Chief Commercial Officer at EV, comments: “Unlike in the accumulation phase, our research has found that risk appetite changes when an individual is at or in retirement. Individuals in our study were almost 20 per cent more likely to result in a risk band 2 or 3 out of 5 risk profiles when answering our risk questionnaire for an income objective and with capital directly at risk. Conversely, those who were completing a questionnaire with the objective of growing an investment were more than twice as likely to be placed in risk band 4 or 5 respectively out of 5 risk profiles. Understanding a client’s risk appetite while delivering a sustainable level of income through appropriate investments is paramount to an adviser’s suitability process. In line with our research, we formulated a specific income risk profiler questionnaire which seeks to identify an individual’s capacity for loss, rather than their appetite for investment growth. We are now inviting financial advisers to sign up for introductory access to our ESG-enabled income risk profiler, before we are due to launch our fully integrated adviser tools later this year.”

A survey conducted by EV in March 2021 found that an astounding 94 per cent of consumers consider at least one of the ESG environmental, social, or governance factors to be important when making decisions about their investments for growth and/or income. This, combined with figures from the Investment Association, which show a quadrupling in ESG investments throughout 2020, prompted EV to launch its ESG-enabled risk questionnaire tool for growth and for income.

Available across five, seven, and 10 risk profiles, introductory access to the income risk profiler tool is only available directly from EV. “Advisers who sign up now will be given priority access to information around future releases, updates, and integration plans with our industry partners,” Wheeler adds.

EV’s existing growth risk rating methodology has been used since 2012 by many of the biggest fund houses, helping more than 2,000 advisers a year match their client’s risk appetites with appropriate funds for accumulation. EV will shortly be launching a range of webinars and supporting resources to explain their income risk rating methodology in more detail.

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