Great conversations with Thomas Idzorek and Paul Kaplan on the CFA Institute Research Foundation podcast

In a series of four conversations, we discuss their framework for portfolio construction for individuals. The Research Foundation published this work as a monograph. This being a highly technical framework, I am naturally skeptical of the approach.

In episode 1, we explore their framework for lifetime financial advice, and dive into their 8-point call to action for transforming how we approach financial planning, which aims to create asset allocation systems that respond to changing life circumstances.

In episode 2, I challenge Mr. Idzorek and Mr. Kaplan about their framework, diving into fundamental questions about how we define and measure risk tolerance, and in particular whether it should apply to someone's entire economic balance sheet including human capital.

In episode 3, we discuss utility maximization theory in financial planning, examining how personal discount rates and consumption smoothing preferences shape optimal lifetime spending patterns.

Finally in episode 4, we break down the stochastic discount factor, goals-based investing trade-offs, and the messy reality of taxes, ESG preferences, and how their framework would be implemented.

I found these conversations both interesting and enjoying but I do not think their framework provides what is missing in the world of wealth advice.

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