BNP Paribas remains a one star manager
Morningstarhas confirmed sBNP Paribas’one star manager rating following the qualitative assessments of its subcontracted investment management and international equities relationship with Massachusetts Financial Services (MFS).
The research house says despite a rigorous subcontracted investment manager selection process, high staff turnover has led to a serious staff shortage at BNP Paribas.
“This is stretching the workload of BNP Paribas’ investment strategist David Roberts who, in addition to his other responsibilities, is charged with the monitoring of external manager mandates,” the report says.
Prolonged staff turnover and continuing poor performance by BNP funds were the reasons cited by Morningstar for its initial downgrading of the manager to one star late last year.
Last year saw the departure of BNP Paribas’ chief investment officer and head of asset allocation Robert Ellis, group head of fixed interest Rohan George and the head of Australian equities Brian Ingham.
BNP Paribas’ subcontracted international equities manger, Massachusetts Financial Services, had not previously been rated qualitatively by Morningstar.
The research house issued a ‘positive’ sector strength rating for the group due to its solid research process, however Morningstar does have concerns over its highly manual portfolio construction process which leads to a possible key person risk.
There has been no change to the distribution of Morningstar star ratings for BNP’s funds as a result of the qualitative reassessment, with five of the manager’s seven funds retaining either a one star ‘very poor quality’ or two star ‘poor quality’ rating.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
