Modern Asset Allocation for Wealth Management
David M. Berns
- 29 juni 2020
- 9781119566946
Samenvatting:
Praise for Modern Asset Allocation for Wealth Management
"Modern Asset Allocation for Wealth Management succeeds in its ambitious goal of making asset allocation more intuitive and practical. By accounting for behavioral biases, psychometric testing, and financial goals, to name a few, David Berns enables advisors to implement asset allocation systematically with a sound scientific underpinning. This is a must read for any advisor who wants to truly understand why we invest the way we do and how best to work with clients."
Michael Pompian, CFA, CAIA, CFP, founder and CIO, Sunpointe Investments; author of Behavioral Finance and Wealth Management
"Historically, Modern Portfolio Theory (MPT) has been an insightfulbut utterly uselesstool of modern finance. David Berns flips this situation around and outlines exactly how investors can make MPT great again. I learned so much from this book. Read it."
Wesley R. Gray, PhD, CEO, Alpha Architect; co-author of Quantitative Value and Quantitative Momentum
"David Berns has blazed a trail through the wilderness that lies between the practical challenges of wealth management and the leading edge of quantitative finance. Along the way, readers will learn innovative strategies to confront diverse investor preferences, taxes, risk premia strategies, estimation error, non-normal distributions, and many other real-world challenges. This pioneering guide is rigorous, clear, and relevant. No wealth manager should leave home without it."
Will Kinlaw, Senior Managing Director and Head, State Street Associates; co-author of A Practitioner's Guide to Asset Allocation
"Modern Asset Allocation for Wealth Management smartly incorporates behavioral theory to improve client risk preference assessment. The realization that clients don't require the textbook version of an optimal portfolio, and that financial planners should focus on creating a portfolio that clients will stick with during down markets, is an important contribution to the advancement of wealth management."
Michael Guillemette, PhD, CFP, Professor of Personal Financial Planning, Texas Tech University
An authoritative resource for the wealth management industry that bridges the gap between modern perspectives on asset allocation and practical implementation
An advanced yet practical dive into the world of asset allocation, Modern Asset Allocation for Wealth Management provides the knowledge financial advisors and their robo-advisor counterparts need to reclaim ownership of the asset allocation component of their fiduciary responsibility. Wealth management practitioners are commonly taught the traditional mean-variance approach in CFA and similar curricula, a method with increasingly limited applicability given the evolution of investment products and our understanding of real-world client preferences. Additionally, financial advisors and researchers typically receive little to no training on how to implement a robust asset allocation framework, a conceptually simple yet practically very challenging task. This timely book offers professional wealth managers and researchers an up-to-date and implementable toolset for managing client portfolios.
The information presented in this book far exceeds the basic models and heuristics most commonly used today, presenting advances in asset allocation that have been isolated to academic and institutional portfolio management settings until now, while simultaneously providing a clear framework that advisors can immediately deploy. This rigorous manuscript covers all aspects of creating client portfolios: setting client risk preferences, deciding which assets to include in the portfolio mix, forecasting future asset performance, and running an optimization to set a final allocation. An important resource for all wealth management fiduciaries, this book enables readers to:
- Implement a rigorous yet streamlined asset allocation framework that they can stand behind with conviction
- Deploy both neo-classical and behavioral elements of client preferences to more accurately establish a client risk profile
- Incorporate client financial goals into the asset allocation process systematically and precisely with a simple balance sheet model
- Create a systematic framework for justifying which assets should be included in client portfolios
- Build capital market assumptions from historical data via a statistically sound and intuitive process
- Run optimization methods that respect complex client preferences and real-world asset characteristics
Modern Asset Allocation for Wealth Management is ideal for practicing financial advisors and researchers in both traditional and robo-advisor settings, as well as advanced undergraduate and graduate courses on asset allocation.