Dogmatic investment approach inappropriate
The investment industry needs to move beyond arguing about the merits of different investment strategies and create an approach that blends all of them to get the best characteristics, according to QIC managing director of lifecycle strategies, Professor Michael Drew.
Speaking at the Fund Executive Association conference in Melbourne, Drew said that there were too many "or this or that" arguments about strategic (SAA), tactical (TAA) and dynamic (DAA) asset allocation approaches, and balanced versus active investments.
Investment managers need to develop an approach blending the best of all approaches, he said.
"We've got some of the best practise on the planet around the investment decision, investment governance, and timeline of returns. We have been to too many of these things over the last 18 months where people bang on about DAA, versus SAA, versus TAA ... surely it's time we had 'and, and' conversations. It's the best of those things."
The industry also shouldn't choose between a balanced investment approach, a target date investment approach, or the best investment outcome over a life cycle, but use a number of "levers" to reach their goal for clients, Drew said.
"I think the challenge now is that the best of all of those debates needs to be brought to the table, to provide solutions," he added.
The industry also needed to blend the best of all fiduciary policies to come up with the best option, Drew said.
AUTHOR
Benjamin Levy
Recommended for you
With Fortnum Private Wealth and Professional Financial Services now unified under the Entireti umbrella company, CEO Neil Younger has detailed to Money Management the firm’s new direction and future expansion.
The FAAA has suggested looking offshore for overseas financial advisers to ease the adviser shortage, but are employers willing to take on the burden of workplace visas?
There may be a huge influx of alternatives coming to the market, but timing and access difficulties mean advisers can easily end up disappointed with their selection, according to Morningstar global CIO Dan Kemp.
An NSW individual has pleaded guilty to one criminal charge of providing unlicensed financial services after promoting crypto investments at national seminars.
