We held a stochastic modelling seminar in October 2009 to debate and review the topic:

“This House believes that stochastic modelling tools are the best way to deliver financial advice to clients via intermediaries and that these tools must be a core part of any platform proposition.”

The attached paper provides an overview and includes input from the tools providers, actuaries, compliance experts and IFA businesses.

With a large amount of actuaries and mathematicians in the room (indeed, one opened his speech with the casual aside “I was in the Warsaw Institute of Mathematics last Friday....”!) there were highly technical sessions as well as those with a more business orientation.

This white paper acts as a summary to the seminar in what we hope is a comprehensive - and comprehensible - guide to what was discussed by our expert audience on the day.

And for those of you who are after the really in-depth stuff, then take a look at this article by James Xiong, PhD CFA, Senior Research Consultant at Ibbotson Associates. James further explores the implications of fat-tail and truncated Levy Flight.

Please log in to download the report below. The report may also be viewed by registered users via the events page.

NB. The paper provides the US contact details for Ibbotson – anyone wanting a local contact should speak to Geoff Balzano, CEO, Morningstar UK Ltd on +44 (0)20 3107 0024

The Platforum team