Risk-aware Lifecycle Investing: Accumulation vs Decumulation Regimes
The nature of risk changes depending on whether an individual investor is saving or spending from a portfolio. Speakers will examine the implications for portfolio management of this risk transformation, and present frameworks practitioners can employ to improve upon traditional mean variance optimization.
Jim Sia will discuss valuation based dynamic asset allocation during the accumulation phase vs the decumulation phase of an individual investor's life. The framework presented will target the probability maximization of achieving a target wealth level, rather than targeting mean variance optimization.
Richard Faw will draw on his actuarial background to demonstrate how during the decumulation phase, the investible range of the efficient frontier is shortened because the marginal penalty of variance eventually overtakes the marginal benefit of increased return. He will also demonstrate portfolio optimization for the decumulation phase within the sustainable withdrawal rate framework, and by extension how the alpha pursued during this phase should preference risk reduction over return enhancement.
Richard Faw, CFA, CAIA, FSA, FRM, Chief Investment Officer, Vernal Point Advisors
Richard has nearly two decades of experience in the consulting and investment advisory business. Before joining Vernal Point Advisors, he founded Setarcos Investment Advisors in 2011 to work with families, trusts, and other taxable clients. Prior to then he worked for Mercer, a major multinational consulting firm, serving as the lead investment advisor to institutional investors with assets totaling more than $3 billion.
Richard's role at Vernal Point is to lead the development of the firm's capital market forecasts and its core asset allocation strategies. His varied professional training and experience allows the firm to bring quantitative rigor and consistency to the construction of the highly customized portfolios characteristically required by Vernal Point's client base.
Richard earned a Bachelor of Science degree in mathematics from the University of the South, is a CFA Charterholder, a Chartered Alternative Investment Analyst, a Certified Financial Risk Manager, and a Fellow of the Society of Actuaries.
Jim Sia, CFA, Head of the Specialty Team, GMO
Mr. Sia leads GMO’s specialty team, comprised of the sub-advisory and defined contribution business segments for the Global Client Relations team. Prior to joining GMO in 2011, he was the director of defined contribution and vice president of business development at Wellington Management Company. Previously, he was the east region field vice president at Charles Schwab Retirement Plan Services. He is also the vice chair and co-founder of the Defined Contribution Institutional Investment Association. Mr. Sia earned his B.S. in Finance from Babson College and his M.B.A. from Boston University. He is a CFA charter holder.
$75 for Members
$90 for Nonmembers
After April 15th, those interested are welcome to attend as "walk-ins". Attendance fee will be collected at door
Location and Time:
City Club of San Francisco
155 Sansome St.
Sit-down lunch will be served.