Graham Rich

Portfolio Construction Forum is drafting a submission, to be delivered to the Financial Adviser Standards and Ethics Authority (FASEA) as part of the consultation process on new continuing professional development (CPD) standards.

The Forum’s submission will set out its significant concerns about the robustness of the proposed CPD regime, and recommend relevant and meaningful alternatives.

The Forum encourages its members, and other interested parties, to read the FASEA proposals and similarly engage with the FASEA CPD consultation process, or to contact the Forum for assistance, prior to the 31 August 2018 consultation deadline.

“The proposed CPD regime falls well short of any reasonable community expectations of FASEA and what drove its formation, and fails to lift the educational standards required of an emerging profession,” said Graham Rich, Managing Partner and Dean at Portfolio Construction Forum.

“If the objective of FASEA is to lift trust and confidence in financial advice, and raise professionalism, then financial adviser CPD activity is obviously a critical piece of the solution. As the FASEA proposal stands at the moment, it will not achieve this pathway. In my view, the proposed CPD regime only addresses the ‘continuing’ aspect of CPD, but ignores the crucial ‘professional’ and ‘development’ elements – as such, it is only doing at best one-third of the job. The proposals fail at every level to show how they will lift CPD standards and outcomes, and meet community expectations” said Rich. “This shows a lack of understanding of core issues, and simply fiddles.”

Portfolio Construction Forum will submit feedback to FASEA in its role as the specialist, independent, investment continuing education and certification service curated for Australia’s and NZ’s investment portfolio construction practitioners.

“Obviously the Forum is actively engaged in providing a range of investment continuing education programs. Although the FASEA proposal would likely be commercially advantageous to us, we don’t believe that it’s in the best interests of professionalism, and so oppose the present suggestions” said Rich.

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Shaun Weston-Cole

The Financial Planning Association of Australia (FPA) has exempted Certified Investment Management Analyst® (CIMA®) certificants from a core component of the Certified Financial Planner® (CFP®) program.

The exemption offers Australian CIMA certificants an accelerated path to CFP certification, and supports growing recognition of CIMA certification as the peak international, technical portfolio construction certification program, for investment and wealth management practitioners and advocates.

Following an independent assessment of the CIMA program, the FPA has awarded “advanced standing” status to CIMA certificants for the CFP 4: Investment Strategies unit. CFP 4 focuses on the development of investment strategies in accordance with the personal circumstances of clients, and constitutes one of four modules which non-exempt CFP candidates must complete, prior to final assessment. Exemption from CFP 4 will be granted to CIMA certificants who meet the entry requirements for CFP, and who request advanced standing when they enrol in the CFP program.

Advanced standing for CFP 4 brings several benefits, allowing exempted CFP candidates to save an estimated 120 hours of study time, and reducing course fees by as much as A$1,550 (based on the charging structure for 2017).

The exemption additionally provides independent confirmation that CIMA certification meets level nine of the government-managed Australian Qualifications Framework, and that CIMA designees have therefore completed a master’s degree-level educational program.

“The FPA’s decision is a welcome recognition of the high educational standards of the CIMA program,” said Graham Rich, managing partner and dean of PortfolioConstruction Forum, which manages and delivers the CIMA program in Australia. “Advanced standing is good news for CIMA certificants who want to use their investment skill and knowledge as a financial planner, and for certificants who work in business development and who wish to gain a greater understanding of the financial planning role.”

Shaun Weston-Cole, head of education at the FPA, said: “The FPA welcomes the addition of the Certified Investment Management Analyst (CIMA) certification to the list of quality education providers approved for advanced standing for the CFP 4 unit of the CFP Certification Program.”

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Graham Rich

Capital Preferences, a leading global financial technology company founded in the United States, has entered into the Australian market and formed a strategic partnership with PortfolioConstruction Forum, naming it the official accreditation provider for a new training program.

Called Quantitative Advice Methods, the program is aimed at financial advisers serving the New Zealand and Australian private banking, superannuation and retail markets, and will focus on the application of game theory and econometrics to client profiling and portfolio construction.

As part of the agreement, Capital Preferences’ customers in NZ and Australia will have the opportunity to enroll their front line staff in an accreditation program overseen and managed by PortfolioConstruction Forum.

“Capital Preferences’ academic faculty are innovative thought leaders who bring something entirely new to the understanding of a consumer’s risk, time and social preferences and how to customise client portfolios with this data,” says Graham Rich, founder and director of PortfolioConstruction Forum.

“I believe they will see great success in our sophisticated and client-focused community. Ours is a market that desperately needs innovation and new thinking like theirs.”

Bernard Del Rey, CEO and Co-Founder of Capital Preferences says: “Portfolio Construction Forum is the ideal accreditation partner to share our firm’s research and methods.

“Graham has built a community where the most forward looking and disciplined professionals gather to practice their craft. We represent the next generation of enterprise consumer profiling and product recommendation tools and our focus on robustly tested methods originating from the top levels of academia and science is shared by PortfolioConstruction Forum members.

“We respect PCF members for the way they apply their skills and look forward to bringing them and their clients breakthrough tools.”

As part of the relationship PortfolioConstruction Forum will feature general content from Capital Preferences’ and make it available to all of its members. Pre-qualified advisors, who are members of either FPA or Certified Financial Planners are eligible for accreditation in the Quantitative Advice Methods program and can receive discounted individual subscriptions to the firm’s advanced technology, beginning with the 15 April 2016 release of the firm’s Australian product line. The training program will include deep exposure to the research and methods developed by Shachar Kariv, Chief Scientist, Co-Founder and Chair of the Economics Department at University of California Berkeley.

The relationship launched yesterday with a talk by Daniel Silverman, Senior Research Advisor for Capital Preferences and Professor of Economics at Arizona State University.

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The New Zealand Investment Symposium is being presented by an exceptional faculty of Australian investment experts visiting Christchurch this week, exclusively to support Christchurch financial advisers affected by the recent earthquake, and their clients.
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Sydney-based Christchurch expat Graham Rich, and organiser said Wednesday’s Symposium, and a dinner for the 100 delegates and their partners is being hosted free-of-charge for all Christchurch-based financial advisers. A number of financial advisers from as far away as Auckland and Invercargill have also flown in especially to support their colleagues and to benefit from the education.
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The Symposium is designed to achieve several objectives, said Graham Rich of PortfolioConstruction Forum. “Christchurch based advisers have not had time to manage their own continuing professional development recently and so we can help with that by bringing the best of the best investment minds to them. Our presenters really want to offer practical and professional help, to enable investors to get the flow-on benefit of better quality advice. Plus, we get to spend some money in Canterbury to support local business at a time when many conferences have taken the easy option and gone elsewhere. Finally, all surplus proceeds will be donated to the government earthquake fund.”
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The interactive one-day program features leading economists, investment managers and senior business leaders from Australia.
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Speakers, who have all donated their time and costs, plus contributed to the funding, include Australian’s Jonathan Pain investment strategist and author of the Pain Report; Hamish Douglass, CEO and investment manager of Magellan Financial Group; Peter Dorrian, investment specialist of PIMCO; Tim Farrelly, investment strategist of farrelly’s Investment Strategy; Paul Barrett, Head of  ANZ Advice Australia and Graham Rich are New Zealanders who have returned from Sydney especially to present. In addition, George Kerr, CEO of Torchlight Investment Group and John Ombler, acting Chief Executive of the Canterbury Earthquake Recovery Authority will open the program with a briefing and  Brigadier Anne Campbell (NZ Army retired) will close the program with a specialist disaster recovery management session.
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In addition, New Zealand businesses actively supporting the program include Morningstar (an investment research business), OnePath (an investment funds manager) The Strategi Institute (an adviser training business).
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“I reckon all participants can be thrilled with the outcome,” said Graham Rich.

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Top financial services experts provided investors with an optimistic view of the current financial climate at the PortfolioConstruction Forum Markets Summit 2011 which took place in Sydney yesterday.

Having reflected on the current economic position of the world, experts from around the globe provided the high profile attendees with their unique insight into what is – and what is not – an investment bubble, and what that means for constructing portfolios.

Joe Bracken, Head of Macro Strategies, BT Investment Management

“Classic mean-variance optimisation may not protect you during bubbles since it tends to put you into assets with higher expected returns – typically the inflating one!  Adding alternatives to your portfolio should help with performance stability. Overweight equities and alternatives and underweight bonds seems to be a sensible starting point.”

Bob Baur, MD & Chief Economist, Principal Global Investors

“The US and world economies have embarked on an economic expansion that has the potential to be better and last longer than the consensus expects.  The biggest risk is inflation, now in emerging markets and within a couple of years in developed countries.  Portfolios should be adjusted to account for the new environment.”

Steve Keen, Associate Professor, University of Western Sydney

“The dominant economic force is OECD nations deleveraging from excessive private debt, and Australia avoided as serious a downturn as the rest of the OECD by delaying the deleveraging process. Renewed deleveraging now that the house price bubble is ending will counter the stimulus from China.

“Our house price bubble dwarfs that of the USA, and Australian households are now more debt-encumbered with much higher interest rates. Government policy helped light the fuse and Ponzi lending by the financial sector provided the fuel. Prices will deflate as the rate of growth of mortgage debt slows, with negative impacts on aggregate demand and employment.”

Kumar Palghat, Managing Director, Kapstream Capital

“The US economy is turning the corner – the housing back log will be cleared and employment data is improving. The FED will continue to maintain easy monetary policy. Risk assets should continue to do well (equities, commodities, hedge funds, High Yield, etc) but bond markets are starting to sell off as safety of bonds is no longer required.  Solutions for European debt problems are in the works, and the US recovery continues to be very bullish for Asia which already has overheating economies.”

Anthony Kirkham, Head of Investment Management, Western Asset Management

“Investors need to be aware that there is a difference with bonds – it is important that they do not confuse Aussie bonds with those of other Governments. There is opportunity in Australian bonds and corporate bonds.”

Chris Joye, Managing Director, Rismark International

“It is absurd to suggest that it is likely Australian house prices will fall by 40%, or that house price declines will accelerate. While the next year or so will be relatively weak, Australia’s housing market will yield investors solid through-the-cycle total returns, as it has done over the last 30 years.”

Jacob Mitchell, Portfolio Manager, Platinum Asset Management

“There is real inflation risk not being addressed by governments in emerging markets in part. This needs to be factored into our investment planning.”

Sean Fenton, Portfolio Manager, Tribeca Investment Partners

“The outlook for the Australian equity market is positive with all of the key drivers remaining supportive.  Valuations are attractive, liquidity is abundant and economic growth around the world is either stable or improving.  The growth recovery leads us to generally favour cyclicals, but mainly those with global exposure.  The tightening moves in China do raise the risk of a near term correction in commodities so we remain neutral on resources.  The commodity boom is a boost for the Australian economy, but comes with higher rates and acts as a brake on a highly geared consumer.  We tend to favour mining services and financials for domestic exposure.”

Ric Deverell, Director – Commodities, Credit Suisse

“We are currently seeing major structural change as a result of, for example, another 3billion people entering the global economy in the last 10 or so years and consequent demand. This is going to last for multi decades until supply ultimately meets demand.”

The Summit was a platform for many debates and attendees were witness to diverse presentations throughout the day. However, in summing up, Tim Farrelly, Principal, farrelly’s noted a big shift from previous expectations that emerging markets would lead recovery. The discussion instead outlined surprise improvements in developed markets with potential risks in the emerging markets.

The overall outlook throughout the Summit was one of cautious optimism. The global financial leaders expected positive economic conditions in the three to five year outlook, with expected bumps further down the line.

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