Jupiter warns advisers against products that ‘over-diversify'

Jupiter's Neil Carter has warned advisers against products that over-diversify investments in a bid to fit the mould of modern portfolio theory and regulation.

Changes in regulation - which mean advisers have to focus more on robust and repeatable outcomes - have seen the rise of model portfolios advisers can use to allocate a client's assets according to risk and volatility. At the same time, modern portfolio theory states it is possible to construct an 'efficient frontier' of optimal portfolios offering the maximum possible expected return for a given level of risk. However, Carter, Jupiter's director of strategic alliances, told delegates at an event in London to be wary of modern portfolio asset allocation tools that allocate "something ...