However, it’s not always that easy because managers change the process overtime and are not likely to tell you. An adviser can only pick this up by regularly reviewing funds. Rating agencies are again useful here because they normally review funds on an annual basis and should be able to spot managers who make up the rules as they go along.

However, rating agencies do not always monitor funds in real time other than for major changes like the loss of a fund manager. If the adviser wanted ongoing monitoring of a fund’s portfolio he/she would need to either do it him/herself or get a customised service from a rating agency that had the capability to do it.

Frank Potaczek is head of insight and consulting (fund management) at Defaqto