Financial services place too much faith in flawed risk models

By Anne Richards, Chief Investment Officer, Aberdeen Asset Management

Life is full of things that work in theory but not in practice. Sadly, the way financial services assess risk is one such example. And ultimately, our one-dimensional approach to risk could well sow the seeds of the next crisis.

Too much reliance is placed on neat quantitative solutions even though they are flawed.

Investment is both an art and a science and risk should be calculated through qualitative and quantitative methods. Our one-dimensional approach to risk could well sow the seeds of the next crisis.

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