thewealthnet

Are your funds likely to become suspended?

Eric Dickinson, independent consultant, 09/08/2019

Fund suspensions are nothing new and unfortunately such incidents will continue to happen in the future.

Naturally when a fund does suspend, this can invalidate a whole client portfolio from a suitability perspective, leaving organisations liable for the advice they provide.

Remarkably, access to the relevant information to spot an impending fund suspension has never been easier to obtain. There is a realisation that quant analysis and asset allocation, the historic basis used by advisers when determining risk, is only part of the story.

The need for ready access to fund due diligence information has been recognised and is being addressed by making key, hard to get, information readily available. The recent events at Woodford serve to emphasise the point.

The larger wealth firms and more sophisticated fund selectors use many data points to assess the health of a fund, but here are some further key metrics one might consider when assessing a fund's suitability:

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