Advisers urged to shield clients from risk
Investors in the retirement space have an obligation to deliver their clients a cocktail of low risk and high predictability, a senior investment manager believes.
Speaking at the Association of Financial Advisers’ (AFA) GenXt Roadshow, Perpetual’s Adam Curtis said that as portfolio construction becomes more complex, investors must seek out stability and protection for their clients.
“The conversation I would encourage you to have going forward is not so much targeted at a targeted risk profile, but focused on a targeted return,” he said.
He said for some clients, one of the best ways to make money is to not lose it.
“Protecting from volatility, protecting from draw-down risk is crucial,” he added.
“It should not and it does not mean less equity automatically in a portfolio, but be aware that the equities that we’re acquiring, be aware of the characteristics those equities bring to a portfolio and really, really importantly, be aware of the prices you acquire those assets at.”
Curtis stressed it was unsafe and unwise to rely on one market alone to deliver clients’ objectives and urged an industry-wide move towards more predictable portfolios.
“I would encourage you to go back to your businesses, to go back to your dealer groups, to go back to your research houses, to talk to fund managers and other providers about the tools they can provide you to ensure as an industry we can deliver that promise to our clients of greater predictability.
“I can’t guarantee you performance, but I can guarantee you that with these tools we will create better client relationships, more trust, more comfort,” he concluded.
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