JP Morgan launches custodial tool for super funds using the SRM
31 Aug 2012
J.P. Morgan Worldwide Securities Services has launched the Online Portfolio Analytics Lab (OPAL). The service utilises portfolio analytics tools to help institutional investors assess risk across individual portfolios and optimise asset allocation and investment manager selection.
OPAL specifically targets Australian superannuation funds working to comply with Financial Services Council (FSC)/Association of Superannuation Funds of Australia (ASFA) guidance on disclosure of investment risk in the new Shorter Product Disclosure Statements (SPDS) regime, via the "Standard Risk Measure" classification system.
Superannuation trustees are now obliged to disclose a Standard Risk Measure for each investment option offered in a superannuation product covered by the SPDS regime, using a seven level classification system (where 1 is ‘very low risk' of negative returns, and 7 is ‘very high risk'). The Standard Risk Measure is designed to allow members to compare investment options that are expected to deliver a similar number of negative annual returns over any 20-year period.
ASFA expects that trustees using the Standard Risk Measure system will be able to demonstrate that they have a proper basis for the conclusions reached; that they can justify the classification decision and that they have access to robust data, systems and processes that substantiate the decisions to categorise the investment strategies as they have.
David Braga, Investor Services Product head for Australia & New Zealand, said: "The OPAL tool gives superannuation trustees a powerful, web-based tool that enables them to analyse their underlying data and quickly assess their level of investment risk, as part of their wider responsibility in considering and disclosing investment and other risks for each investment strategy to comply with the new FSC/ASFA guidelines.
"OPAL can help institutional clients make more informed decisions and optimise their portfolios through the creation of innovative and forward looking solutions that address both current and future needs."
Author: IPA staff