FE supports the focus on increased transparency and the need to ensure that there is no conflict of interest.

The FCA has raised concerns over the conflict of interest that arises when payments are taken by ratings agencies to rate funds, and is further concerned that some third party ratings agencies do not offer a whole of market review. FE would like to highlight the importance of ratings in helping to make the industry more accessible. We welcome any focus into this area that will increase transparency and help investors better assess the investment products available to them.

FE provides a range of independent, quantitative ratings, which assess performance, managers, risk and the funds that the adviser industry has the most confidence in (Our Adviser Fund Index, or AFI). The quantitative approach to fund ratings means that they are unbiased and well respected by advisers, we rate all funds with sufficient history and we do not take payment from fund groups to rate their funds.  Uniquely, we provide a suite of ratings that give investors a 360-degree view of the industry and when used together allow people to be better informed and make a better investment decision. 

In addition to our purely quantitative ratings we also publish the FE Invest Approved list. This list of 130 passive and active funds pulls together all our quantitative ratings and applies a qualitative overlay where our analysts meet with the fund managers face to face. The list covers all sectors and asset classes, providing advisers with a complete fund universe. The list covers all corners of the market from the largest household names, to focused specialists from some of today’s smallest and innovative investment boutiques. The shortlist is regularly reviewed and updated, to ensure that it always represents today’s best fund choices.