David Berns: Modern Asset Allocation for Wealth Management

Today’s conversation is with David Berns, an emerging thought leader in asset allocation and behavioral finance, who is pushing the boundaries on how to best measure real-world behavioral preferences and build optimal portfolios that actively incorporate this extra information.

We open the conversation with a discussion of his involvement in the design and launch of three new ETFs, which seek to deliver an investment experience that addresses both traditional mean-variance preferences, and also accounts for real investor behavioural and cognitive biases. We then discuss core themes from his new book, “Modern Asset Allocation for Wealth Management”, which marries advances in portfolio optimization with a scientific approach to measuring real investment risk preferences.

I was impressed with David’s thinking about fundamental investment principles and driving ambition to go beyond traditional portfolio formation techniques to account for loss aversion and reflection, and higher moments of the return distribution. It’s clear David genuinely cares about client satisfaction with their investment experience and is advocating for ways to treat clients as unique individuals with novel preferences and goals.

This discussion has something for everyone from advisors to portfolio managers to planners and even for end investors.