Conference Programme
March 23 London, March 25 Manchester
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9:00am Chairman’s opening comments
9:05am - Keynote speech
Challenges that reach to the very heart of modern portfolio theory need to be confronted with empirical evidence, common sense and confidence. Popular, yet flawed, product structures add to the challenge. This session seeks to:
- Meet some of these challenges head on, with the evidence
- Help refocus advisers on meeting their fiduciary obligations to their clients
- Appeal to the adviser community to use its power to demand better, cheaper portfolio products from providers
Tim Hale – Managing Director, Albion Strategic Consulting
9:45am Stochastic modelling and portfolio construction - Avoiding pitfalls
Stochastic modelling is central to modern financial theory and to the process of portfolio construction, aiming to quantify uncertainty around the expected returns on assets. Here we examine the limitations of the model and aim to reveal a more robust analysis, moving to consider key strategies for asset allocation and fund selection.
- Stochastic modelling -- where can it go wrong?
- Extrapolation errors
- Asset allocation -- key considerations
- Implementing relevant portfolio analysis
Craig Heron – Henderson New Star
10:25am What does investment risk really mean?
Do investors really know what investment risk they are taking? Why is it that many investment portfolios did not behave as investors expected (or hoped!) during 2007-2009? We must truly understand what is under the bonnet of a portfolio in order to identify and control investment risk. This session will cover:
- Portfolio construction versus fund picking
- Does correlation analysis still work?
- Hedging out unwanted risk
- Is alpha predictable and is it worth paying for?
- Should I set volatility parameters?
Simon Armstrong, Partner, Saltus
11:05am Coffee
11:20am Core and satellite – Combining asset classes
Strategies based around traditional asset classes, with performance measured relative to a benchmark, no longer provide adequate diversification for many investors, especially in times of increased market volatility. Here we dissect how to balance one investment against another.
- Can you achieve equity-like returns at lower risk?
- Passive trackers and active management blended
- Why include alternative asset classes in your asset allocation?
- What are the benefits of a benchmark unconstrained approach?
Paul Duncombe - Global Head of Strategic Solutions, Schroders
12:00pm Incorporating alternative asset classes
Alternative investments, such as hedge funds, are a valuable addition to diversified portfolios, reducing volatility and increasing risk-adjusted returns. But how can investors access these important asset classes while mitigating the risks associated?
- Why should hedge funds be considered a viable “asset class”?
- Historical returns - adjusting for bias
- “Blow Ups”: LTCM, Madoff, Amaranth: Can they be avoided?
- Sources of returns: Beta, Alpha and Alternative Beta
- Hedge fund synthetic replication: Capturing returns with daily liquidity
Michael Azlen – Chief Executive, Frontier Capital Management
12:40pm Lunch
1:40pm CASE STUDY: Portfolio construction in practice
Leading IFAs each with differentiating practice models discuss the key themes of their portfolio construction process and how this relates to the overall philosophy of the company. Each IFA will have 10 minutes to describe the process, and then all 3 will form a panel to answer questions from the floor
IFA contributors:
David Stockdale - Principle Partner, Foster Denovo
Anthony Williams – Managing Director, Evolve Financial Planning
Simon Gibson – Director, Atkinson Bolton Consulting Ltd
2:20pm Square pegs - Round holes
Many think that multi manager investing is all about research. This session will explore the issues beyond manager / fund research relevant when constructing either a portfolio of funds or a multi manager solution.
- Bringing managers together in efficient portfolios
- Understanding the costs and impacts on a portfolio of a manager change or event
- Things to consider when implementing asset allocation through third party managers
Peter Hugh-Smith - Managing Director, Russell Investments
3:00pm The four horsemen of the behavioural apocalypse
Traditional economists claim that markets are efficient, meaning that market prices always reflect the information available. But not everyone agrees. In this session Bruce Weber explains the big 4 behavioural biases and examines how to align financial planning with client mentalities.
- Saliency, framing, anchoring and regret
- Behavioral limitations and decision making
- Countering psychological factors
- Helping clients understand the factors at play
Bruce Weber – Professor of Information Management, London Business School
3:40pm Coffee
3:55pm From client to portfolio – The process from A to Z
Yellowtail’s Dennis Hall asserts that portfolio construction is a business process comprising a collection of related, structured activities that produce a specific outcome. Dennis shares with you how he set up Yellowtail’s portfolio construction process and how he communicates the company’s philosophy simply, consistently and repeatedly.
- Creating process-driven model portfolios
- Process implementation
- Communicating the process to your clients effectively and consistently
- Improving scalability of the business
Dennis Hall – Managing Director, Yellowtail Financial Planning Ltd
4:35pm Liability and risk in fund recommendation
Recent high profile actions by the FSA to suspend one gravity defying fund serve to highlight the need for IFAs to demonstrate that their processes are robust and repeatable. Insufficient due diligence can be expensive with the risk of regulatory censure, loss of reputation and client litigation. This session will focus on:
- The ‘whats?’ and ‘whys?’ of fund due diligence, and the ‘hows’
- Risk mitigation for you and your clients
- Quantitative and qualitative data consideration
- On-going monitoring against sensible benchmarks
Phil Billingham – Strategy Consultant, David Ingram – Partner, threesixty Services
5:15pm Close of conference and networking drinks
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