Recently, I attended the Eureka Report Around the World of Investing Forum. The overwhelming impression was that global investing is very new to many Australians.
It is not beyond the realms of possibility that the "prudent person" approach to playing it as safe as possible in portfolio construction might undergo a significant shift.
PortfolioConstruction Forum Academy Spring Seminar 2014 features three sessions. This Resources Kit contains the materials for preparing for the Seminar. After the Seminar, it will also contain the presentations for each session.
Perhaps the most crucial change in our retirement planning language is simply to rename "retirement".
The dynamic duo (Kitces and Pfau) are back in their search for the ultimate truth about retirement income planning and how to structure portfolios to minimise drawdowns.
Investment management has long been the backbone of financial planning. But is it the future for financial advisers? I think not.
What do Richard Nixon, novel "Zen and the Art of Motorcycle Maintenance", and Bridgewater Associates have to do with risk parity investing and Conference 2014?
As the first day of our annual Conference program, we hosted the Finology Forum. Our particular focus of finology was as it applies to the giving of investment advice.
The one-day Conference Finology Forum 2014 program (within the overall three-day Conference program) featured leading investment thinkers from around the world presenting on how to more effectively help investors manage their expectations and investment portfolios. This CPD Quiz is for delegates to complete, to receive CPD accreditation.
This paper reviews the principles, practices, risk management requirements and implementation steps needed to build absolute return focused portfolios.
This paper explores the thesis that capturing the traditional relationship of fixed income in the total client portfolio will require more untraditional approaches going forward.
Six stocks make up just under half of the Australian equity market. This research paper examines the impact of this on investors' returns, and whether it is responsible investing.
This research paper discusses (in simple terms) how to reconnect the concept of Risk and Return via the practical application of volatility derivatives to portfolios.
This paper explores the opportunities within private equity and private debt and examines their role in providing downside protection for investors.
Over the past 40 years, the high-yield landscape has grown exponentially. Knowing the key risks and emerging opportunities can help map a path forward.
We've come to accept a world where the US drives what happens in the global economy and markets. But that's changing - with significant implications for portfolios.
New research found 78% of consumers care about being comfortable in the future - that alone tells us where the future is for advisers.
It is not surprising that bond managers have significant difficulty in outperforming a market cap-weighted benchmark.
Do geopolitical events involving potential or actual military conflict really matter in the constructing of investment portfolios?
Symposium NZ 2014 facilitated debate on the three pillars of portfolio construction – markets, strategies and investing - to help delegates build better quality portfolios. This CPD Quiz is for delegates to complete, to receive Structured CPD Hours.
The staple of retirement planning - save a percentage of income - makes it surprisingly difficult to ever reach retirement. The alternative is much easier and more successful.
PortfolioConstruction Forum Academy Winter Seminar 2014 featured four sessions: Risk, return & relating; Statistics, lies, and investment performance analysis; How safe are safe withdrawal rates in retirement?; and, Communicating and learning with and from clients.
What we are witnessing in Iraq is a war within Islam. Will it mutate into a broader regional war thereby threatening oil supplies?
Investing differently gives no certainty of great results (increasing the odds of being wrong as well as right). But it is a necessary but not sufficient ingredient for great performance.
Tomorrow we expect to see the latest Band-Aid solution being applied to the eurozone. Forgive me if I don't roll out the barrel. As I see it, there are four key problems.
Across the industry, portfolio rebalancing is the norm - with little agreement on the optimal frequency. So I experimented to find out which frequency is best.
NZ FMA new CEO, Rob Everett, gave an interesting briefing by way of introduction. It contained a very strong warning for the short term, and an intriguing line of thinking for the longer term. Both focused on behaviour.
Most research assumes retirees maintain a consistent standard of living. A new study disproves this, implying we may be overestimating funds needed to retire by up to 20%.
Understanding what is going on under the bonnet at central banks is key to understanding what will drive markets – and therefore how to best position portfolios.
While it is well established that equity valuations impact medium-term equity returns. It is less well known that starting period equity valuations also impact medium-term equity volatility and bond-equity correlations.
There is huge variety in retirement income strategies. This paper introduces "longevity risk aversion" and its impact on safe withdrawal rates.
Older adults are crossing the most challenging and complex frontier of their lives. To earn a role with them, financial advisers have to learn more about how older clients think and communicate.
As Glen Whitman argues, "What distinguishes good economic thinking from bad is recognition of the subtle, creative, and often unforeseen ways that people respond to incentives."
Studying economics these days, it is quite possible to get a degree without ever having come across the name of a single economist. This is a pity and it is not really appropriate to a social science.
There is an enormous power and prestige for a profession in doing public good. Done correctly, we will stand a good chance of earning more respect than politicians in future Reader's Digest polls.
Towers Watson's compendium of insights into global equity investing contains useful insights about issues many portfolio construction practitioners face every day.
It is fine to have positive returns year-in, year-out as an objective or goal. But, absolute returns should never be presented as an expectation, as disappointment is inevitable.
An empirical study found that in advanced economies, the greatest factor that has increased the growth of government is the welfare state. Economists are highly sceptical about such transfers.
As investment advisers, we love to inundate prospective clients with data. But disseminating large amounts of data is actually counter productive.
Stein's law, a rule of thumb for politics, economics and business, is that "If something can't continue, it will stop." Here are four inevitable changes in the investing environment.
Fortunately, New Zealand consistently ranks near the top of international indices measuring economic freedom. But this also means that we might take it too much for granted.
The Academy Autumn Seminar 2014 featured four sessions: 10 golden rules for portfolio construction; Reassessing the global debt spectrum; Currency revisited - to hedge or not to hedge; Volatility investing - the next frontier.
Recently, I ran a session for a group of 20-years plus CFP veterans. What became evident was that their idea of using technology and engaging collaboratively with clients was very different to mine.
Target date funds are becoming the workhorse for DC plans but there are problems with the approach. This paper offers a portfolio construction framework to overcome them.
In recent months, we've highlighted one school of research on funding retirement income, being the sustainable withdrawal rate approach. This paper takes a different approach.
George W. Bush allegedly once said, "the problem with the French is that they don't have a word for entrepreneur." Indeed, most people have no idea what entrepreneurship really means.
A recent Australian study of how clients prefer to be communicated with from their financial advisers sheds some interesting light on the challenge.
While most financial advisers aspire to work with HNW clients, very few successfully do so with any scale or significance. Most advisers will have a few HNW clients, but all too few of them. Why?
In theory, recent currency devaluations should make EM countries more competitive. But they're also facing a technological jump that they may not be able to keep up with.
In Shakespeare's Hamlet, Polonius's advice was "Neither a borrower nor a lender be For loan oft loses both itself and friend." In contrast, borrowing and lending between strangers makes the world a better place.
When meeting with a prospect for the first time, financial advisers should limit discussion about their background to 3 minutes and address the 4 key questions most prospects want answered.
Does Fama and French's latest work, A Five-Factor Asset Pricing Model, provide any information that can be of practical value to advisers or investors? The answer is no.
What impact has the FMA's Guidance Note: Limited Personalised Advice published in December had on how advisers handle lower value clients?
It is through competition between wants and different ways of satisfying them, that markets create prosperity. In economic thinking, competition has two main functions.
As the logic goes, retired clients deplete their portfolios, and more pass away as the years go by, so a firm with aging clients is akin to a rapidly depreciating asset. But is this true?
It's the eternal debate - can active management outperform? Two recent reports offer some interesting insights into the issue.
Central banks stand at the apex of the banking confidence pyramid but cannot insulate the public from the consequences of collective fiscal and financial follies.
A new research paper looks specifically at withdrawal rates in the Australian context, confirming the legislated minimums for account-based pensions are much too high.
Aside from CPD changes, the most distinct change in the new Code of Professional Conduct for AFAs is to prioritise the "client first" rule. We asked advisers what this means in day-to-day business.
It is common knowledge that a trusted adviser has a far higher chance of selling products or services than one who is not trusted. However, what is meant by the word trust?
This Resources Kit is a deluge of videos, podcasts, and papers for all 18 sessions of the jam-packed Markets Summit 2014 program - The Great Escape (what will markets be like in the QE runout?) so you can "attend" even if you weren't part of the 500-strong audience.
As competition in the financial advice business intensifies, advisers must focus on those activities that add the most value for clients.
Few economists are more famous than the commonly regarded founder of economics, Adam Smith. Over 238 years later, his ideas are still relevant.
When investment experts are in agreement, we should always ask what could go wrong with the consensus.
Communicating with clients is one of an adviser's most important responsibilities. In the modern world, the options of how to do this are many. What works?
If we're explaining a "norm" to clients that embeds a social proof, we should be using norms that show what is successful, not describing the commonality of failure!
In rapid-fire presentations, 18 experts from various parts of the world debated the biggest issue facing the financial world.
The boom demographic joining Facebook is age 65+ at the moment. If retirees are flocking to social media channels, shouldn't you?
William Bengen established the 4% rule - and showed a higher exposure to equities was better for retirement portfolios.
financialalert asked the heads of four financial adviser bodies about their plans for 2014, and what they will have on offer for advisers in the coming months.