"Researchers cannot conduct full due diligence or exhaustive audits on managers and their products. Therefore, much reliance is necessarily placed on management interrogation, including capacity, track record, governance and public documents such as product disclosure statements, trust deeds, financial accounts etc."
Independent research reports are designed to assist advisers to meet their compliance requirements by providing reliable and impartial assessments of investment products, promoters, their track record, the investment market and the risks involved.
"As part of this, advisers are obliged to be aware of the wider investment market and products available by way of comparison."
PIR says that most funds research is designed for general product advice, not as a blanket endorsement of managers, and is a point-in-time evaluation.
It says the researchers cannot monitor daily activities "or be held responsible for changing circumstances beyond their control."
Consequently reports require regular updates for reinvestment purposes. "All the key facts, including key considerations relating to risk/return, should be clearly set out in all research reports."
PIR says investors should use research, along with taking professional advice which should help ensure investments are suitable to their own circumstances, return expectations and risk tolerance.
"All investments require at least annual reviews, particularly property and mortgage funds, whether they be open or closed funds or rollover proposals (which constitutes a new investment). With all due respect to product issuers, the logic of conflict dictates that advisers should not place total reliance on the product issuer's reports, statements and/or newsletters."
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