Russell enhances strategic modelling

Focus to boost risk management

By Victoria Papandrea
Thu 28 Jan 2010

Russell Investments intends to roll out various governance and risk management initiatives to the Australian market this year.

Russell Investments has plans to further develop its strategic asset allocation modelling software this year, which aims to help boost risk management processes for superannuation funds.

"What that enables us to do is just better manage, better forecast and better align investment outcomes with client risk tolerances," Russell Investments director consulting and advisory services Greg Liddell told InvestorDaily.

Risk management was one of the major issues to arise out of the global financial crisis for superannuation funds, Liddell said.

"Clearly, the behaviour of asset classes and the probability of outcomes that we saw over the last two years was underestimated by most modelling software, hence I think there is a focus very much on taking risk management to a higher level," he said.

Russell is also currently working on another global initiative around governance consulting, which it intends to roll out to the Australian market this year, Liddell said.

"We're spending a great deal of effort looking at linkages between governance structures and outcomes," he said. "We've completed a pilot project in the UK and we'll be rolling that out to all the other geographies early this year, including the Australian market."

Liddell said the initiative would enable Australian superannuation funds to compare their governance protocols against those of their global peers.

"Basically, the program will allow us to get more granular data on governance structures and simply get a clearer picture of where clients sit against global best practice," he said.

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