Avoiding exposure to riskier assets and varying the proportion of a portfolio allocated to different managers, depending on market conditions, are both being used to manage risk in the private banking arena. But understanding client psychology and recognising the shortcomings of many risk models is vital, writes Elisa Trovato
While the recent move into a core/satellite approach by the French government may have sparked somewhat of a resurgence of interest in the area, the main reason is the wide adaptation of exchange traded funds. ETFs make asset allocation switches cheap and easy to make with a direct impact on risk management
