Client Voices

Allianz Global Investors’ Kristina Hooper Urges Advisors To Help Clients Create a "Risk Budget" in Investment News

Kristina Hooper, head of portfolio strategies at Allianz Global Investors (AGI), authored an article that appeared in the November 7, 2011 Investment News urging advisors to help clients who are confused and overwhelmed by today’s extraordinary markets by prioritizing their biggest concerns and acting on them.

The basis for Hooper’s bylined article was AGI’s quarterly survey among 1,003 investors with $250,000 or more in assets that tracks investor sentiment regarding the markets and economy and planning and investing for retirement. The most recent poll found that 2011’s market volatility has taken its toll on investor confidence, leading to a state that AGI has termed “investor angst and paralysis” when it comes to investment decision making.

“Advisors have a historic opportunity to enhance client relationships by helping investors  come to grips with economic and market realities, prioritize their biggest fears and take steps in their portfolios— not only to protect them from risks but also to take advantage of the market’s inevitable opportunities,” wrote Hooper.

Just as there is risk in investing too aggressively, there is risk in taking too many measures to protect against all of a client’s concerns, or in overweighting some risks while neglecting to protect against others that might be more threatening, Hooper warns. She recommends hedging against a client’s biggest threat and then creating a risk budget, or distributing risks against the rest of the portfolio.

“Big market and economic events can trigger a whole slew of worries for your clients that can be tough to sort through when emotions are running high,” Hooper adds.  “Client confidence and trust is a renewable resource that you can sustain by being there for your clients, reexamining their deeply held concerns and responding with meaningful asset strategies that are refocused as necessary.”

To read the full article, click here.

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