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ABI to drop cautious and balanced managed sector labels to increase clarity for customers

The ABI today announced new names for its managed fund sectors, to help customers better understand how their savings are invested. The new fund sector names have been shaped using extensive consumer research and will replace labels such as "cautious" and "balanced", which customers find confusing.  

The ABI managed fund sectors contain almost 2,000 life and pension funds, worth an estimated £340 billion, approximately 80% of all money invested in managed funds.   ABI research showed that consumers want jargon-free titles for fund sectors that give them simple information about the minimum and maximum exposure to shares. Following consultation with stakeholders, the ABI has decided to replace risk-based labels with factual descriptions of the level of shares involved.   


OLD Managed Sector names

      NEW Mixed Investment Sector names

Defensive (up to 35% equity) Managed

      Mixed Investment 0-35% Shares

Cautious (up to 60% equity) Managed

      Mixed Investment 20-60% Shares

Balanced (up to 85% equity) Managed

      Mixed Investment 40-85% Shares

Flexible (up to 100% equity) Managed

      Mixed Investment 60-100% Shares


Helen White, the ABI's acting Director of Life and Savings, said:  

"It was becoming increasingly clear that terms like "cautious" were confusing for consumers so the ABI was keen to act quickly and make changes to help customers. Our research of over 2,600 adults told us that the new names are significantly less likely to lead to consumers misinterpreting the type of funds they choose to invest in.   

"We found that consumers want simple information about the minimum and maximum amount of their money that an investment fund will put into shares.  The new fund sector names do just that."  

The new sector names will apply from April 2011.  

We will be issuing guidance to ABI members encouraging them to review their fund names during the year April 2011- April 2012.  

The ABI will be publishing its consumer research into new sector names.   The sectors are not designed to indicate the level of risk of funds contained within and funds are not monitored on that basis

Last updated 01/07/2016