The so-called smart money, represented by managers of pension funds, is anticipating a rise in investment complexity and challenges facing investment strategies over the next two years.
A new research report from risk management solutions firm Ortec Finance shows that an increased focus on climate change and a search for yield are driving asset allocation decisions among pension funds.
The international study of pension fund managers responsible for a collective $1.9 trillion worth of assets under management found just 41% believe pension schemes in general are well-prepared for securing the yield they need in order to be fully funded or buyout-ready in the face of climate change challenges.
Meanwhile, the study found 90% expect to see a rise in investment complexity and the challenges facing their funds over the next two years, with almost all funds (97%) interviewed in the U.S., UK, Australia, Canada, the Netherlands, Switzerland, and the Nordics saying technological advances are enabling them to invest in more sophisticated strategies.
Even as ESG strategies in general have lagged the overall equity market performance, their investing appeal continues to grow.
“Climate change risks are dominating the agenda for pension funds having a major impact on scenario modelling and stress testing while also making the search for yield more complicated,” Willemijn Verdegaal, director of strategy and markets at Ortec, said in a statement.
“Technology is however available which can help pension funds balance the demands of rising investment complexity while implementing strategies to address the issue,” he added. “Pension funds need to manage their balance sheet effectively in order to achieve long-term objectives while dealing with short-term risks. That includes identifying major risk sources as well as looking at future pensions, contributions, and funded levels.”
That is translating into increased allocations to green bonds and climate-specific funds, something 62% of pension funds plan to do over the next two years, with 27% intending to dramatically increase allocations to green bonds and 24% expecting to dramatically increase allocations to climate-specific funds.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
