Rick Bookstaber: Avoiding Complexity Is 'Risk 101'

The Long View

Morningstar

Finance, Dan Lefkovitz, Amy Arnott, Entrepreneurship, Investing Leaders, Jeff Ptak, Investors, Christine Benz, Influential Investors, Careers, Long-term Investing, Financial Services, Business, Investing, Morningstar

4.5 • 775 Ratings

🗓️ 17 August 2021

⏱️ 53 minutes

🔗️ Recording | iTunes | RSS

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Summary

The risk-management expert and author discusses the differences between risk tolerance and risk capacity, how market cycles impact risk, and how to keep things simple by being 'pre-armed.'

Transcript

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0:00.0	At Jackson, we've created a digital retirement planning experience with you and mine.
0:05.5	Visit jackson.com to explore our easy-to-understand resources and user-friendly tools
0:10.1	that are designed to enable financial professionals and clients to plan a path to financial freedom.
0:15.5	Jackson is short for Jackson Financial Incorporated, Jackson National Life Insurance Company, Lansing, Michigan,
0:20.5	and Jackson National Life Insurance Company of New York, purchase New York.
0:26.5	Please stay tuned for important disclosure information at the conclusion of this episode.
0:32.8	Hi, and welcome to the Longview. I'm Jeff Patak Chief Ratings Officer for Morningstar Research Services.
0:38.2	And I'm Christine Ben's Director of Personal Finance and Retirement Planning at Morningstar.
0:43.1	Our guest this week is Rick Bookstabber. Rick is the head of risk at Fabric, a startup he founded to provide risk management software to individual investors through the financial advisors that serve them.
0:54.8	Prior to founding Fabric, Rick held a number of senior risk management roles, most recently
0:59.0	as chief risk officer at the University of California system, and before that at various
1:04.4	hedge funds and banks, including Bridgewater, Front Point Partners, Morgan Stanley, and Solomon
1:10.2	brothers. He also served in the Obama administration
1:13.0	where his work included stints with the Financial Stability Oversight Council and at the SEC
1:17.7	on the Volker Rule and other regulations. Rick has authored several books including A Demon
1:23.3	of Our Own Design, which was published in 2007, as well as the end of theory, which was published
1:29.3	in 2017. Rick received his bachelor's in economics from Brigham Young University and earned a
1:35.6	doctorate in economics from MIT. Rick, welcome to the Longview. Thanks for inviting me.
1:42.5	That's our pleasure. So maybe to get started, I don't think everyone in our audience will be familiar with what a professional risk manager like yourself does.
1:52.0	And so maybe a good starting point is you walking us through how it is you define risk and, you know, whether that definition is universal or whether it can vary depending on
2:02.9	context or other factors. Could you do that? Sure. You know, there are risk managers in a lot of
2:09.2	different areas. When it comes to financial markets, the risk manager is really looking at
	...

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