A new study by EDHEC reveals that asset-liability management techniques can add real value to private wealth management.
Working from the observation that the contribution of asset-liability management techniques developed for institutional investors is not yet familiar within private banking, the study entitled “Asset-Liability Management Decisions in Private Banking” shows the expected benefits of a transposition of that kind.
In the end, it is not so much the short-term risk represented by the volatility of the assets that is the determining element in taking an individual’s risk aversion into account, but the probability or the expectation of the individual’s long-term financial objectives not being achieved.
This study was sponsored by Pictet & Cie.