Compliance Memo

Compliance Memorandum 2013-12; Change of fund risk rankings: Standard Life Mutual Funds

For more information, contact:

Compliance Team
compliance@gpwealth.ca

Date Issued:

November 13, 2013

We have been advised by Standard Life Mutual Funds that they have recently made changes to the risk rankings of the following funds:

FundCurrent RiskNew Risk
Standard Life Diversified Income FundLowLow to Medium
Standard Life U.S. Dividend Growth FundLow to MediumMedium
Standard Life U.S. Dividend Growth ClassLow to MediumMedium
Standard Life Global Dividend Growth FundLow to MediumMedium
Standard Life Global Dividend Growth ClassLow to MediumMedium
Standard Life Canadian Equity Growth FundMediumMedium to High
Standard Life Canadian Equity Growth ClassMediumMedium to High
Standard Life Canadian Equity Value FundMediumMedium to High
Standard Life Canadian Equity Value ClassMediumMedium to High
Standard Life European Equity FundMediumMedium to High
Standard Life Canadian Small Cap FundMedium to HighHigh
Standard Life Canadian Small Cap ClassMedium to HighHigh

As a best practice, review each client’s portfolio holding any of these funds for suitability. At a minimum, a review of the clients KYC and portfolio must occur prior to any new purchase in the affected plan.

Where the risk ranking of the existing holdings now exceed the client’s stated “Plan Risk Tolerance”, a recommendation must be made to rebalance the client’s portfolio to bring it into compliance.

We must caution financial advisors that updating a client’s risk tolerance to simply match a new risk ranking with existing holdings in an effort to maintain the affected plans onside with KYC may be inappropriate. At minimum, when faced with this circumstance, advisor notes must be maintained documenting a discussion on the amended client risk tolerance.

As always, if you have any questions or comments, contact the Compliance Department by email at compliance@gpwealth.ca.