Graham Bentley: The risk-reward coin is now double-headed

Beware the latter-day alchemists

clock • 4 min read

Most asset allocation processes thrust upon advisers now look at things the wrong way round, warns Graham Bentley, with profilers calculating a risk level in the absence of an investment objective

"Ships in a harbour are safe. But that's not what ships are built for…" Admiral Grace Hopper Investing is primarily about returns - mitigating our future deficiency needs and, if we are lucky, fulfilling some aspirations too. We forego spending now, in exchange for benefits in the future. Asset allocation aims to deliver those required returns without undue risk - it is about efficient portfolio management. We have, however, created a set of conditions where the risk tail now wags the investment dog. Most asset allocation processes thrust upon advisers are risk-focused - profile...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Watch Professional Adviser's Working Lunch with Schroders - Beyond the Pulse: Essential insights for financial advisers in 2025

Catch up on the discussion

Professional Adviser
clock 10 July 2025 • 1 min read
Investors 'do not understand' implications of private markets investing

Investors 'do not understand' implications of private markets investing

House of Lords Financial Services Regulation Committee looked at the issues

Linus Uhlig
clock 09 July 2025 • 1 min read
NextWealth MD Hopkins on staying ahead of advice sector changes, data challenges and flattening MPS fees

NextWealth MD Hopkins on staying ahead of advice sector changes, data challenges and flattening MPS fees

Making technology work better

Katrina Lloyd
clock 03 July 2025 • 9 min read