Plato works with Milliman on risk

risk management australian equities superannuation funds global financial crisis equity markets

4 April 2014
| By Staff |
image
image
expand image

Boutique Australian equities manager Plato Investment Management has announced it is working with Milliman to overcome the problems of sequencing and longevity risk by developing risk management strategies aimed at enabling investors to maintain higher weightings in growth assets whilst providing tail risk management in times of financial crises. 

The company said the global financial crisis had served to highlight the limitations of traditional balanced funds and, as a result, many superannuation funds were developing “lifecycle” strategies which progressively de-risked investments as members approached retirement. 

However Plato founder and managing director Don Hamson claimed that for many superannuants, reducing sequencing risk in this way simply increased longevity risk. Investment projections showed that fund members and investors could not afford to accept the lower returns associated with less risky portfolios.  

“The issues that impact retirees and how they should invest are substantially different from those of investors focused on the accumulation of wealth,” he said. “Our focus on after-tax investment approaches was the first step in acknowledging these issues. 

“Over the last couple of years we have focused our research efforts on the impact that sequencing risk can have on retiree portfolios and potential solutions to this problem. This has been in direct response to our clients who have been disappointed with the poor returns offered by cash and fixed income, but who are still haunted by the GFC when it comes to investing in equity markets,” he said. 

Hamson said that through his company’s work with Milliman, it was intended to provide clients with access to an institutional-quality risk management platform and approach. 

Milliman practice leader Wade Matterson said the company would effectively be delivering his Managed Risk Strategy (MRS) as an overlay to Plato’s existing fund. 

“By delivering the MRS as an overlay to Plato’s existing fund, advisers and their clients will gain access to a best of breed risk management methodology applied to Plato’s proven equity investment approach,” he said. 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

3 weeks 6 days ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 month ago

Interesting. Would be good to know the details of the StrategyOne deal....

1 month ago

Insignia Financial has confirmed it is considering a preliminary non-binding proposal received from a US private equity giant to acquire the firm. ...

1 week 4 days ago

Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses. ...

1 week ago

Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equi...

6 days 9 hours ago