|
Conference
2014 - Resources Kit
Conference 2014 facilitated debate on the markets, strategies and
investing with particular focus on how to reconnect risk and return in
portfolios - and how best to relate with individual investors in order
to manage their expectations.
The last
decade has seen a distinct disconnect between investment risk and
return, versus what we're taught should be the case. Up to the
GFC, many asset classes and investments were providing seemingly
risk-free return. Since the GFC, the opposite - return-free risk - has
been the hallmark of many asset classes and investments, while others
have performed beyond all expectation. As if to the emphasise the point,
in the first half of 2014, the VIX reached lows similar to those seen
before the GFC.
Whether you attended
Conference 2014 or not, this Resources Kit will help you reconnect risk and return in
portfolios - better relate with individual investors in order
to manage their expectations.
|
|
Quicklinks |
|
This online Resources Kit is a key feature of the
Conference 2014 program
(in fact, all our programs feature an online Resources Kit). It enables
all Members (whether or not they were part of the live "studio audience"
on the day) to "attend" Symposium. It's an invaluable set of
continuing education material.
This Resources Kit includes all the videos, podcasts and papers from the
live program, along with a link to the delegate Workbook, and the two
Backgrounders "Reconnecting risk & return" and "Finology - where
investing meets investors". |
|
Workbook
Backgrounder 1
Backgrounder 2
Insights
Critical Issues Forum
Due Diligence Forum
Finology Forum |
Print it and use the checkboxes on the Timetable to tick off sessions as
you "attend";
Read before "attending" any of the CIF sessions - it's assumed prior
knowledge;
Read before "attending" any of the Finology Forum Sessions
Short 5-10 minute thought pieces from some of the world's leading
investment minds;
The plenary presentations featuring 19 leading investment thinkers;
The elective program presentations featuring another 19 leading
investment experts;
The sessions from the one-day program focused solely on the third "R" –
Relating.
|
|
Insights |
|
About Insights |
These short
5-10 minute insights feature some of the world's leading
investment minds giving their insights around the Conference
theme |
|
Insight 1 |
Prepare to change course
Warning, there may be rocks ahead. Reconnecting risk
and return must surely be the right focus but thinking that
conventional tools will keep us out of trouble will likely be a
big mistake.
Alan Brown, Senior Adviser, Schroders (London) |
Insight |
|
Insight 2 |
The changing nature of interest rates
and inflation
What are the questions that everyone is asking today? When
will interest rates spike? And, what about the increased rate of
inflation? One has to accept the changing nature of these two
elements.
Joan Payden, President & CEO, Payden & Rygel |
Insight |
|
Insight 3 |
Understanding both sides of the risk
and return equation
As we sit today with some unprecedented market conditions,
it's probably more relevant than ever to understand both sides
of the risk and return equation in the fixed income space.
Dr. Michael James Hasenstab, CIO Global Bonds, Franklin
Templeton Investments |
Insight |
|
Insight 4 |
How different fixed income is today
Fixed income has changed, and is very different today versus
what it was years ago. It makes sense to evolve your portfolios
accordingly.
Rick Rieder, CIO Fundamental Fixed Income, BlackRock |
Insight |
|
Critical Issues Forum |
|
About the Critical Issues Forum |
The Conference
2014 Critical Issues Forum was designed by our specialist,
experienced and independent team to cover two of our three
pillars - Markets and Strategies. It featured a carefully
selected faculty of more than 20 leading investment thinkers
from around the world presenting on contemporary and emerging
issues related to the first two "Rs"
– Risk & Return – within the overall Conference theme
"Reconnecting the three Rs - Risk & Return (& Relating).
|
|
Critical Issues Forum 1 |
Reconnecting the three Rs - Risk &
Return (& Relating)
PortfolioConstruction Forum Publisher and Conference 2014 Moderator,
Graham Rich, opened
Conference 2014 in his usual
thought-provoking (and entertaining) way, highlighting key
issues to consider over the jam-packed, marathon program.
|
Resources |
|
Critical Issues Forum 2 |
Dysfunctional risk and return - growth
and barriers to entry
The secular convergence toward modest real growth rates across
the global economy has many investors yearning for yield - so
much so that, in many cases, fundamental risk and return
characteristics have been shown the door as funds have flowed
into perpetually lower yielding income asset classes. This
session asked whether today's portfolios are ready for a longer
than expected low-cash rate cycle? Can income goals be sustained
in light of an extended period of lower returns? By the end of
this presentation, you'll have a better understanding of why
there is dysfunction between market risk and return, and a sound
appreciation of the medium-term risk and return outlook.
Mark Kiesel, Deputy CIO, PIMCO (Newport
Beach)
|
Resources |
|
Critical Issues Forum 3 |
Risk & return: Two investment
approaches
Asset pricing models link risk to average return: higher
risk stocks are expected to earn higher average returns, and
lower risk stocks lower average returns. If risk and return are
imperfectly linked, there is opportunity for investors to
increase average return, without increasing risk. This
return-seeking approach is the traditional approach to stock
selection. Often overlooked is another response to the
decoupling of risk and return, reducing portfolio risk without
reducing average return. This presentation reviewed the evidence
and explanations for both types of investment strategies, with
particular focus on why risk is mispriced in equity markets.
Ryan Taliaferro, Portfolio Manager,
Acadian Asset Management (Boston) |
Resources |
|
Critical Issues Forum 4 |
How best to take portfolio risk
The traditional approach to portfolio construction is to
own a diversified portfolio, and adjust the total risk of the
portfolio up or down. An alternative is to take a bucket
approach, building different portfolios for different income
goals. From a behavioral perspective, using bucket strategies
with clients is appealing, if only to help them stay the course
during stressful times. Is it an asset allocation mirage?
Michael Kitces, Partner/Head of Rsh, Pinnacle Advisory
(Washington, DC)
|
Resources |
|
Critical Issues Forum 5 |
Conversations that matter
The fact that a return may lie within a predictable
statistical range no longer necessarily implies that it is a
return an investor in the "real world" can actually live off of.
That gap needs to be bridged through greater precision in the
form of asset-liability matching for individual investors, and
then related to investors in such a way that they can once again
know and trust that financial security is a fact, not a feeling.
Timothy Noonan, MD Capital Markets
Insight, Russell Investments (Seattle)
|
Resources |
|
Critical Issues Forum 6 |
Residential property – riskier than
equities?
For many Australians, their house is one of their biggest
assets, if not the biggest. With the latest results showing
house prices again growing at a multiple of incomes, this
presentation examines how volatile the asset class really is, at both
the national index level and from the vantage of an individual
buyer (two radically different risk profiles) and argues that,
empirically, a leveraged owner-occupied home is riskier than the
Australian sharemarket.
Chris Joye, Contributing Editor AFR &
Director Yellow Brick Road (Sydney)
|
Resources |
|
Critical Issues Forum 7 |
Reshaping asset allocation after a
perfect storm
Portfolio construction models have changed markedly from the
1990s, evolving from the classic long-only 60/40 portfolio,
through to the introduction of exotic beta and alternatives, to
the current emphasis on asset allocation based on risk factors.
What lies ahead?
Prof Amin Rajan, CEO, CREATE-Research (London)
- brought to you by Principal
Global Investors
|
Resources |
|
Critical Issues Forum 8 |
Are risk and return really linked?
This presentation explores the linkages between investment risk and
return, exploring different types of risk and what return premia
- if any - are attached to each, just how reliable those premia
are in practice, and whether the risks can be diversified. By
the end of this presentation, you will have the ability to
assess different types of risk and return, and, in particular,
see through marketing dressed up as sophisticated analysis.
Tim Farrelly, Principal, farrelly's Investment Strategy (Sydney)
|
Resources |
|
Critical Issues Forum 9 |
The power of the 3rd R
Clients in the 21st century's new economic era will judge
professionals not by their technical expertise, but by their
ability to provide consistent, high quality, personalised
outcomes. Portfolio construction practitioners who want to
flourish in the era of instant internet and robo-advice must
understand how to create value for their clients by providing
them a positive: ROA (Return on Attention), ROI (Return on
Intimacy) and ROE (Return on Empathy).
Dr David Lazenby, PhD, President, ScenarioNow Inc (St Louis)
|
Resources |
|
Critical Issues Forum 10 |
Risk parity portfolios - fad or the
future of portfolio construction?
The first risk parity portfolio was created in 1996 and
the term itself was coined in 2005 (although the idea that a
portfolio should take advantage of multiple risk premia dates
back 60 years to the establishment of MPT). There is a great
deal of debate about whether risk parity outperformance of the
past decade is sustainable or just a quirk of an unusual market
environment, especially given that risk parity portfolios tend
to have a much larger exposure to bonds. This presentation frames the
debate at a conceptual level of what delegates need to
understand to productively participate in a risk parity
conversation, presenting new ideas about how to think
differently about portfolio risk and how are we really trying to
manage it.
Michael Kitces, Partner/Head of Rsh, Pinnacle Advisory
(Washington, DC) |
Resources |
|
|
Risk parity portfolios and the low beta
premium
In recent years, the risk parity approach to asset
allocation has been gaining popularity. While empirical evidence
and intuition support the approach, confidence in its efficacy
also requires a theoretical justification. This presentation
overviews the theory of leverage aversion, which changes the predictions of modern portfolio theory - safer
assets must offer higher risk-adjusted returns than riskier
assets. Consuming the high risk-adjusted returns of safer assets
often requires leverage, creating an opportunity for investors
with the ability to apply leverage. It explains how
risk parity portfolios exploit this opportunity by equalising
the risk allocation across asset classes, thus overweighting
safer assets relative to their weight in the market portfolio.
Cliff Asness, PhD, Co-founder & CIO, AQR
Capital (Greenwich) |
Resources |
|
Critical Issues Forum 11 |
Quiescent markets – why is volatility
so low?
With global volatility reaching multi decade record lows,
there's a strand of thought growing in markets that Central
Banks have investors' backs with ultra-loose monetary policy and
a new 'souped up' version of the Greenspan put. Record low levels
of volatility, however, are natural for this stage of the cycle
and, indeed, forecastable given an understanding of the economic
cycle. If that's correct then the critical questions become:
should we be worried or relaxed? What next? History points to
record low volatility marking the entry point into the final
stages (perhaps final third, perhaps less) of the economic
cycle. That insight is consistent with a multiplicity of other
indicators. This presentation takes you through the structural and economic
drivers of volatility, showing why quiescent markets should be
feared, not embraced, before aruging that we've
entered the last third of the economic cycle.
Chris Watling, CEO &
Chief Market Strategist, Longview Economics (London)
|
Resources |
|
Critical Issues Forum 12 |
Geopolitical risks (and rewards) - the
impact on portfolios
In the context of the often repeated assertion that
geopolitics is far more important in considering investment
markets today, this presentation introduces a geopolitical strategy
methodology to review the current state of the world, arguing
that global multipolarity will increase the frequency, if not
necessarily the magnitude, of risks. This geopolitical analysis
is then related to investor decisions and the implications for
portfolio construction.
Marko Papic, Chief Geopolitical
Strategist, BCA Research (Montreal) |
Resources |
|
|
Geopolitical risks in East
Asia. How worried should we be?
The geopolitical risks in East Asia are growing. China,
emboldened by a growing economy and a leader who has rapidly
consolidated his power, has taken a tough approach to its
periphery. Hardly a week passes without a news report about an
incident of China upsetting its neighbors in its near seas. This
presentation examines how China's actions are perceived in China, and
why these actions don't necessarily spell doom and gloom for
Australia and the region – at least in the short to mid-term.
Linda Jakobson, Visiting Professor, US Studies Centre,
University of Sydney & Nonresident Fellow, Lowy Institute for
International Policy (Sydney) |
Resources |
|
Critical Issues Forum 13 |
Risk rapporting
This presentation argues that formal reports redolent with data
and analysis fail to communicate risks as people actually feel
them. Our panoply of measures may leave us with a warm glow that
we've explained risk but they're likely to have the opposite
effect on those with whom we are communicating. Once risk leaves
the comforting (to us) zone of β, α, σ, CVaR, etc
and falls under the rubrics of Uncertainty and Ignorance,
reports need to be replaced by rapports, by engaged
conversations. Not surprisingly, literature can be a source of
information and inspiration for rapporting on risk.
Prof Jack Gray, Adjunct Professor of
Economics, UTS (Sydney)
|
Resources |
|
Critical Issues Forum 14 |
Investing with risk in mind
This presentation argues that
investors should be aware of the risks they are exposed to
within a portfolio - and of when they are being paid to take
investment risk and when they are not. To know and understand
these issues before and during investment requires a different
approach to those of the past, to build portfolios with better risk awareness in
mind.
Nick Bullman, Founder, CheckRisk (Bath)
|
Resources |
|
Critical Issues Forum 15 |
Behavioural approaches to retirement
risk communication
Individuals are vulnerable to a
number of economic and financial risks as they approach and
enter retirement, including longevity risk, investment risk,
inflation risk, contingency risk and political risk. In the
absence of appropriate guidance around retirement benefits
through incentives, defaults or compulsion, many retirees remain
exposed to these retirement risks. This presentation highlights
how the insights from behavioural finance can be used to enhance
risk communication and retirement outcomes.
Prof Hazel Bateman, Head of School of Risk & Acturial Studies,
UNSW (Sydney)
- brought to you by Challenger
|
Resources |
|
|
Navigating risk through asset
allocation – The 1st order decision
Since the GFC, investment professionals have been
extremely busy as clients grapple with the problems illuminated
by extreme market events. Long-held ideas regarding
correlations, diversification, benchmarks and portfolio
volatility have rightly been questioned by investors. This
presentation addresses the importance of developing improved
and dynamic investment approaches that seek to better understand
and manage total portfolio risk as well as identify sources of
return.
Dan Farley, CIO Investment Solutions,
State Street Global Advisors (Boston)
|
Resources |
|
Critical Issues Forum 16 |
The power of R³
It is given that we all are wired to act foolishly
sometimes, so how can we be better "choice architects" and
"decision reassurers" for ourselves and our clients? This
session grinds new lenses for understanding how changes in
conventional thinking, methods, and tools result in quantum
leaps in performance. The only question is “Are you willing to
be Influenced?”
Dr David Lazenby, PhD, President, ScenarioNow Inc (St Louis)
|
Resources |
|
Due Diligence Forum |
|
Due
Diligence
Forum 1.1 |
Debt - Global
Fixed income: The future is flexible
Over the past few decades, fixed income investors
have enjoyed strong capital gains, an attractive income and the
benefits of diversification. However, with interest rates now at
record lows, uncertainty about timing and extend of future rate
increase is posing challenges to traditional benchmark- oriented
bond strategies. This presentation and paper explore the key
advantages of flexible fixed income management in more detail
and look at the importance of selecting the right strategy and
the right manager when choosing an unconstrained bond fund. In
addition, the presentation and paper discuss the performance of
one approach to unconstrained fixed income in a rising rate
environment to show how investing in benchmark-agnostic
strategies with more flexibility to change duration and sector
exposures can have a positive impact on a portfolio’s overall
risk and return profile.
Nicholas Gartside, CIO Int'l Fixed Inc, JP Morgan Asset
Management (London)
|
Resources |
|
Due Diligence
Forum 1.2 |
Equities - Australia
Alpha Potential – Identifying active
management opportunities
Alpha Potential is gaining traction as another important
quantitative tool available to investors. Its use lies in
identifying opportunities for active management, enhancing the
value proposition afforded to active managers and, ultimately,
their evaluation. This presentation and paper define and review
empirical research on the use of cross-sectional volatility as a
measure of Alpha Potential internationally and within Australia
and, in the context of Active Share and Security Selection,
relates this back to active portfolio management in Australian
Equities.
Robert Penaloza, Head of Australian Equities, Aberdeen Asset
Management (Sydney)
Andrew Kophamel, Head of Performance Asia Pacific, Aberdeen
Asset Management (Sydney)
|
Resources
|
|
Due
Diligence
Forum 1.3 |
Equities - Specialty
Trends and opportunities in global listed
infrastructure
The size of the global infrastructure asset universe will
expand from $40 trillion earlier this decade to over $110
trillion by the beginning of 2030. This presentation and paper
illustrate that the private sector share of these assets is much
larger than commonly believed and that the listed share of
private infrastructure assets has grown consistently over the
last two decades. It argues that there are significant
opportunities to invest in this sector in both advanced and
developing economies in the future, based on a multitude of
trends.
David Hale, Founding Chairman, David Hale
Economics (Chicago)
- brought to you by RARE Infrastructure
|
Resources
|
|
Due
Diligence
Forum 1.4 |
Alternatives
VIX-ING your portfolio
Volatility derivatives have captured the imagination of
investors around the world over the past seven years. This
presentation and the underlying research paper discuss, in
simple terms, what practical application these tools have for
investors in transforming their portfolios. When looking to
reconnect the concept of Risk and Return, what better place to
start than with the barometer of equity market risk itself?
Simon Ho, Executive Director, Triple 3
Partners (Sydney)
|
Resources
|
|
Due
Diligence
Forum 1.5 |
Multi-asset
Building a robust portfolio for future
unknowns
A genuinely diverse portfolio cannot be benchmark
constrained and to prevent hubris, managers need subtle but
powerful constraints combined with risk tools which ensure that
diversity remains strong even in adverse circumstances.
Conventional historic stress testing is helpful and objective
but insufficient in isolation. To ensure risk is genuinely well
diversified takes a sophisticated forward-looking
scenario-analysis process to combine quantitative rigor with
qualitative insights of the plausible but unlikely extreme
stresses we might face. This presentation and paper rework
portfolio construction and risk management for greater portfolio
efficiency, diversity and to generate better investor outcomes.
Mark Foster – Investment Director - Absolute Return & Multi
Asset Investing, Standard Life Investments (Edinburgh)
|
Resources
|
|
Due
Diligence
Forum 2.1 |
Debt - Australia
Evaluating the Australian bond market through a global lens
The seismic shift in fixed income after a 30 year
bull market for bonds has created significant portfolio
construction challenges. This paper analyses the role of Fixed
Income in asset allocation within a new phase of potentially
rising interest rates and explores the thesis that capturing the
traditional relationship of fixed income in the total client
portfolio will require more untraditional approaches. This
research explores this dilemma by considering the Fixed Income
investment universe and proposes that Australian fixed income
portfolio construction needs to: 1. Retain some core local
exposure in order to match the income requirements of Australian
investors' and 2. Expand the opportunity set to achieve the
desired (relatively uncorrelated) relationship of bonds to risky
assets. The significant internationalization of Australian fixed
income over the last 10 years has meant that Australian fixed
income is already globally oriented in composition and also in
terms of the influences that drive returns. This evolution
presents opportunities for investors looking to more optimally
blend bonds with their growth assets
Chris Siniakov, MD Australian Fixed
Income, Franklin Templeton Investments (Melbourne)
Andrew Canobi, Director Australian Fixed Income, Franklin
Templeton Investments (Melbourne)
|
Resources |
|
Due
Diligence
Forum 2.2 |
Equities - Australia
Are you hanging your client’s investment
aspirations on 6 stocks?
Investors hold a portfolio of Australian shares for
their role in generating strong total returns, and the
preference is to achieve these returns with a ‘smooth ride’.
However, contrary to this aspiration, the most common approach
is to invest within tight relative constraints of the benchmark,
suggesting the benchmark represents the best risk-adjusted
opportunities. The top six stocks in the ASX 300 represent 45%
of total market capitalisation and 50% of the market risk. A 4%
tracking error constrained manager, for example, must hold in
the vicinity of 15-20% of these stocks even if they do not like
them. This presentation and paper examine whether this is
responsible investing.
Olivia Engel, Head of Active Quantitative Equities Asia-Pacific,
State Street Global Advisors (Sydney)
|
Resources
|
|
Due
Diligence
Forum 2.3 |
Strategies
Breaking the Risk On/Risk Off Cycle
The GFC highlighted the shortcomings of traditional asset
allocation in managing portfolio risk and underscored typical
fear led human behaviour. For those nearing or in retirement,
the GFC also highlighted the impact of sequencing risk. Bonds
did provide some correlation benefits when growth asset class
correlations approached one in the GFC, but historically low
absolute and real interest rates and tapering risk place
question marks on the role of bonds going forward. This
presentation and paper describe an alternate approach to
managing a risk on/risk off world, allowing investors to
maintain or increase exposure to growth assets while
experiencing a smoother ride.
Dr. Don Hamson, Founder & MD, Plato
Investment Management (Sydney)
Wade Matterson, Principal & FRM Practice
Leader, Milliman (Sydney)
|
Resources
|
|
Due
Diligence
Forum 2.4 |
Equities - Specialty
Private equity - Diversifying equity portfolios
Boosted by monetary policy experiments in the advanced
world, capital markets continue to flourish. Public equity
valuations have disconnected from underlying earnings and there
is a distorted link between perceived and actual risk. This
presentation and paper explore the opportunities within private
equity and private debt whilst examining their role in providing
downside protection for investors.
Urs Wietlisbach, Executive Vice Chairman,
Partners Group (Zug)
|
Resources
|
|
Due
Diligence
Forum 2.5 |
Multi-asset
The quest for returns in the new world paradigm “Redux”
Given the backdrop of a sustained period of lower global
growth, rich valuations from traditional assets and an eerie
calm before the storm in asset price volatility, this paper and
presentation explore a different approach to asset allocation,
together with exploring alternative returns sources to reduce
the reliance on traditional asset classes to drive returns in
the period ahead. The analysis finds that the individual
application of each to investor portfolios can result in a
significant improvement in return, risk and diversification –
and, when these two concepts are combined together in one
portfolio, the results can be dramatic.
David Griffith, Senior Investment Strategist, BlackRock
International Strategies Group (Sydney)
|
Resources
|
|
Due
Diligence
Forum 3.1 |
Debt - Global Credit
New directions in high-yield investment
Among the various disconnects that investors have
experienced as a result of the financial crisis is the idea that
bonds are no longer risk free. It’s time to accept the idea and
move on – to broaden the traditional idea of fixed-income as a
form of risk mitigation and view it also as a risk-and-return
proposition. This paper and presentation explore how global
high-yield markets have moved ahead of investor perceptions in
this respect, and why they will continue to develop as a diverse
and attractive - though, of course, not entirely risk-free -
opportunity for income investors.
Guy Bruten, Senior Economist Asia Pacific,
AllianceBernstein (Melbourne)
|
Resources |
|
Due
Diligence
Forum 3.2 |
Debt - Australia
Demographics versus The Bear
Demographic understanding is now one of the most important
elements in the areas of government and - importantly for
investors - future drivers in financial market returns. This
presentation and paper discuss current demographic trends around
the world including the impact they are having on growth and on
bond markets, before turning to the perceived bond bear market
and exploring whether it really exists - and, how all this
impacts fixed income allocations in portfolios.
Vimal Gor, Head of Inc & Fixed Interest,
BT Investment Management (Sydney)
|
Resources
|
|
Due
Diligence
Forum 3.3 |
Equities - Australia
Practitioner's guide to building absolute return portfolios
This presentation and paper review the principles,
practices, risk management requirements and implementation steps
needed to build absolute return focused portfolios and achieve
absolute return objectives. They argue that many risk management
techniques remain relevant but their application and focus need
to change.
Nick Griffiths, CIO, Pengana Capital
(Sydney)
Antonio Meroni, Senior Fund Manager,
Pengana Capital (Sydney)
|
Resources
|
|
Due
Diligence
Forum 3.4 |
Equities - Global
Lengthening the investment time horizon
Investors are increasingly short term in their orientation,
even while demographic trends point to longer life expectancy
and the need for larger pools of retirement funds. This
presentation and paper explore the view that there is a time
horizon arbitrage opportunity in the marketplace which those
with a disciplined investment process can capitalise on. Company
fundamentals do not change nearly as much as equity market
prices, and herein lies the opportunity for investors with a
longer-term view.
Sanjay Natarajan, Institutional PM, MFS
Investment Management (Singapore)
|
Resources
|
|
Due
Diligence
Forum 3.5 |
Equities - Specialty
Capturing the Emerging Market equity premium with lower risk
This presentation and paper examine the empirical relation
between risk and return in emerging equity markets and find that
it is flat, or even negative. This is inconsistent with
theoretical models such as the CAPM, which predict a positive
relation, but consistent with the results of studies which have
previously examined the empirical relation between risk and
return in the US and other developed equity markets. The
findings are robust to considering a universe of large-cap
stocks only, to considering longer holding periods and to
controlling for exposures to the size, value and momentum
effects. Finally, the presentation and paper find low
correlations between the volatility effects in emerging and
developed equity markets, which argues against a common-factor
explanation.
Frank Wirds, Client Portfolio Manager,
Robeco (Hong Kong)
|
Resources
|
|
Finology Forum |
|
Session 1 |
What is finology anyway?
Finology is the emerging (and converging) research field
covering the study of minds, customs and behaviours with respect
to money. Our particular focus of finology is as it applies to the giving of investment advice. It
incorporates behavioural finance, and much, much more. This
session ensures delegates have a sound appreciation of the scope
and role of finology, in helping them better relate to
investors.
Michael Kitces, Partner/Head of Rsh, Pinnacle Advisory
(Washington, DC)
|
Resources |
|
Session 2 |
Finology: The Financial Frontier
What is the meaning of Money? Needleman said, “Money has
a way to bring reality to situations”. If so the challenge for organisations, advisers and clients is to have more scientific
clarity helping to expose what money (and therefore investing)
represents in their clients world. This session explores new
insights into the nature of money.
Dr David Lazenby, PhD, President, ScenarioNow Inc (St Louis)
|
Resources |
|
Session 3 |
The essential art of storytelling
Often dismissed or
forgotten, or even unknown or undiscovered, a purposeful story,
articulated with passion and conviction, is a key ingredient in
inspiring others to support a dream... and to trust us. And
fulfilling dreams is what all those in the wealth management
world have to offer - but this will only happen if the community
find us to be trustworthy. Storytellers may be perceived as
being too "soft" in our world demanding as it does facts,
disclosure and information or, perhaps, too "old-school", too "sales'y".
Instead, reward comes from the ability to talk technical
information laden with TLAs, SOAs, and the skill 2 send gr8 txt
msgs. Anyway, doesn't storytelling just come naturally to some,
not something to be proud of? This session makes the case for us
all to re-embrace the lost art of storytelling in our lives and
in our businesses, so we can better inspire and engage with our
communities.
Graham Rich, Publisher, PortfolioConstruction Forum (Sydney)
|
You had to
be there |
|
Session 4 |
Top investment stories for investors
This three-part, practical session highlights case studies of
ideas advisers have used in their efforts to ensure more
effective communication with their clients, which have resulted in more
meaningful communication in reality. Delegates
then discuss and share their ideas, successes and failures. By
the end of the day, via this three-part session, delegates
will have learned 10 ways to better relate with their clients,
so as to more effectively help them manage their expectations and
portfolios.
Tim Farrelly, Principal, farrelly's Investment Strategy (Sydney)
|
You had to
be there |
|
Session 5 |
Risk & return mythbusters: Improve
outcomes with active listening
Common beliefs held amongst investment managers and advisers include "I just need to manage the fund/portfolio for the right
outcomes", and "My investors and clients understand the
investment objective and they are
confident it will achieve this". But are these statements a
reflection of reality or investment myths? In this session, some
of our common investor expectations are scrutinised by focusing
on investor-driven research. By the end of this session,
delegates will understand why the objectives, construction and
positioning of investor portfolios must be dynamic according to
changing investor circumstances, and how this process can combat
these common risk/return myths.
Fredrik Axsater, Global Head of Defined
Contribution, State Street Global Advisors (San Francisco)
|
Resources |
|
Session 6 |
Belief is not enough
Belief and philosophy when it comes to investing are in
themselves not enough. Without culture and rigour around the
systems, structures and processes, it is highly unlikely an
investor will maintain their beliefs in all market conditions
and cycles. They will instead ultimately succumb to the
behavioural flaws for which man is known so well, as it applies
to investment decision making. This session discusses some
common behavioural faults that impact performance and provide
insights into how to maintain an unwavering belief and
philosophy for over the long term.
Simon Mawhinney, Portfolio Manager, Allan
Gray (Sydney)
|
Resources |
|
Session 7 |
Conversational methods that accelerate
trust
Using leading edge psychology methods, this session focuses on
the individual money constructs that influence our brains
"anticipatory" nature about money. We review the "Fuzziness of
Logic" and explore a whole-brained-approach to improving client
outcomes, as well as the six basic response skills psychologists
– and financial advisers – must master.
Dr David Lazenby, PhD, President, ScenarioNow Inc (St Louis)
|
Resources |
|
Session 8 |
Managing expectations: keeping clients
goal-focused
Research in biology, physiology and neuroscience now agrees that
humans’ interpretation of risk is multi-dimensional. A simple
client questionnaire is therefore likely to give a misleading
indication of their risk tolerance, leading to a portfolio that
is not aligned with their true wealth objective. This session
focuses on an alternative approach which is to construct a
portfolio that targets the client's specific wealth goal,
providing an objective measure of the portfolio's success. We
discuss the adviser's constant challenge - to keep clients
focused on their wealth goal when they are distracted by the
many other factors that influence their perception of risk.
Kajanga Kulatunga, Portfolio Specialist, MLC Investment
Management (Sydney)
|
Resources |
|
Session 9 |
I’ve been thinking about… my key
takeouts
This session identifies clear key takeouts from the program, and
actions delegates can take when back in the office, to better
relate with investors and be more effective in helping manage their expectations and
portfolios. We start with each of the Finology Forum 2014
faculty summarising their key takeouts from the day, before
delegates share their key takeouts and actions they plan to take
to better relate with investors going forward.
|
You had to
be there |
|
|
