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:
| Fund | Current Risk | New Risk |
|---|---|---|
| Standard Life Diversified Income Fund | Low | Low to Medium |
| Standard Life U.S. Dividend Growth Fund | Low to Medium | Medium |
| Standard Life U.S. Dividend Growth Class | Low to Medium | Medium |
| Standard Life Global Dividend Growth Fund | Low to Medium | Medium |
| Standard Life Global Dividend Growth Class | Low to Medium | Medium |
| Standard Life Canadian Equity Growth Fund | Medium | Medium to High |
| Standard Life Canadian Equity Growth Class | Medium | Medium to High |
| Standard Life Canadian Equity Value Fund | Medium | Medium to High |
| Standard Life Canadian Equity Value Class | Medium | Medium to High |
| Standard Life European Equity Fund | Medium | Medium to High |
| Standard Life Canadian Small Cap Fund | Medium to High | High |
| Standard Life Canadian Small Cap Class | Medium to High | High |
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.