View more on these topics

MM debate: Asset allocation fundamentals remain unchanged

The fundamentals of asset allocation in relation to risk have not changed as a result of the credit crunch, according to panellists at the Money Marketing RDR & Economic Update debate.

Speaking at the debate today in London, Bluefin group director of research and product development David Cartwright said people have just taken more notice of the risk of asset allocation as it has become more visible.

Cartwright said the likes of counterparty, money market and currency problems have all introduced a new type of risk to the IFA business.

“We as a business are focused on asset allocation and investment risk and as an industry we have not focused closely enough on institutional risk that we have to consider through the likes of structured products among other areas.”

Taxbriefs editorial director Danby Bloch said: “Clearly the risk was always there we just didn’t see it. Past performance is not always a future guide, particularly recent past performance. It seems to me our perception of risk needs to change quite considerably as we have accepted the traditional financial theories without acknowledging that things simply happen in markets.

“We are now in a different market, but again there will be opportunities and in five to 10 years time the likes of equities and corporate bonds are likely to look cheap historically.”

Seven Investment Management marketing director Justin Urquhart Stewart says: “There is a focus on a short-term issue of a long-term event. Risk management tools that IFAs are given such as ‘sarcastic modelling’ tools are astonishingly inflexible and are all about carrying out the investment process without looking at the risk process. The biggest problem we do have is the poor sentiment that we are continually doomed instead of realising those that are still working are better off. Trust and confidence is the key.”

The RDR debate day has been sponsored by Aegon , Prudential and Clerical Medical


Snapshot to show structured values

Barclays Wealth has launched an online valuation document to help advisers and clients ascertain what their structured products might pay out on maturity.

New approach could veto senior appointments

FSA chief executive Hector Sants has said that the new regulatory approach to staff competency may not have allowed former HBOS director of group risk Jo Dawson to be hired by the bank.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm