Vanguard, one of the world’s largest asset managers, launched its LifeStrategy range of five risk-rated multi-asset funds in 2011. A2Risk worked with the company to develop a risk profiling tool to help advisers and their clients better understand investment risk – ultimately improving their ability to make the most appropriate portfolio choice.
“Our partnership with A2Risk addresses the fundamentals of investor attitude to risk, which is an enduring conversation, as the success of LifeStrategy shows. Thanks to A2Risk’s tools, advisers know that Vanguard is a place they can come and have a sensible conversation about matters important to investors.”
Nick Blake, former head of European marketing and product at Vanguard
Vanguard case study: Download here
The LifeStrategy range was launched as a way to address a perceived gap in the market for multi-asset portfolios, as financial advice was beginning to transition away from fund selection to a more holistic planning approach.
At the same time, the regulator was pushing investment firms and advisers to develop a greater understanding of risk in all its forms. We worked with Vanguard to tailor our Attitude to Risk Questionnaire (ATRQ) to create a tool to help advisers have a meaningful conversation about risk with their clients before any investment decisions were made.
“The tools in the market felt one-dimensional – just measuring the investor attitude bit but without the capacity for loss,” explains former Vanguard head of European marketing and product Nick Blake.
Our approach considers the three main ‘dimensions’ of risk: attitude to risk, capacity for loss, and the need to take risk. Combined, these three factors give advisers a wider insight into an individual’s feelings about investment risks – and make it easier to have conversations about appropriate products and strategies.
Vanguard was drawn to the academic rigour we apply to the ATRQ, as well as the regular testing and continuous development and improvement. The outputs from our process can be mapped directly onto Vanguard’s own risk descriptions, ensuring a cohesive and clear message throughout.
Speak to us today to find out how we can help your company be a part of the risk conversation.