Executive Meeting with Rafael Hurtado
Today's financial advisors must be able to separate the wheat from the chaff in the face of a flood of information
OBS Business School held its IV Executive Meeting of 2024 with the participation of Rafael Hurtado, Director of Investment and Strategy at Allianz Investment Solutions. Together with Dr. Casilda Güell, Dean of OBS, Hurtado analysed the challenges of investing in today's volatile world, in which the simplest strategies and common sense prevail.
After twenty-five years managing portfolios, Rafael Hurtado has witnessed the enormous changes that have taken place in Spain and the rest of the world. Events such as the 9/11 attacks, the 2008 financial crisis, wars and pandemics have marked the lives of millions of people and companies around the world. It should be enough to realize that out of the Ibex 35 companies of 15 years ago, only eight remain today. This does not mean that they have disappeared, but they have been bought or merged. That is why it is difficult to deal with permanent change. Hurtado believes that training, flexibility, dynamism and technology are essential to take advantage of new market opportunities.
In increasingly global markets where anything that happens in one corner of the world affects everyone, there is a need for greater risk control. That's why companies like Allianz have increased their focus on their customers, increasing their training and information through videos and reports, especially since the pandemic. "Today, being up to date is not an option, but a duty," says Hurtado. And for this, technology helps a lot, especially in decision making during an investment process. New tools make processes faster and more secure, and allow diversification and lower-cost trading. But, Hurtado points out, "nowadays technology alone is not valid, it needs human intervention and I believe that this will continue to be the case for decades to come". That is why it is so important to have a financial advisor who knows how to build trust with the client. Someone who can explain the best times to sell or how to diversify your portfolio. "In the long run the stock market always goes up, Hurtado says, because companies are worth more because they are in bigger economies. And although the sector already had the most advanced systems, the truth is that in the last 25 years there has been a huge change in the way of working: "Today there is much more information to process and it is the job of professionals to separate the wheat from the chaff," he says.
Rafael Hurtado recognises good investment opportunities in emerging countries, where growth is expected to be higher over the next 25 years due, on the one hand, to their population dynamics and, on the other, because they have a productivity gap for historical reasons that will probably not be eliminated, although it will be closing. However, he believes that it is necessary to be very selective and to find out, before carrying out an operation, who are the directors of the company we want to focus on, as well as its main shareholders. Hurtado advises using simple strategies, investing only in assets that we know and understand and, above all, diversifying as much as possible to avoid risks.
Speaking about ESG investments, Hurtado believes that today every company must be guided by these criteria, otherwise it runs an extra-financial risk, since, beyond the ethical aspect, it is exposed to financial penalties and the flight of clients. "This is something that is of increasing concern to society, and therefore to us as well," he says. And he believes that training financial advisors in both hard skills (technical knowledge) and soft skills (soft skills) is vital to be able to build trust with clients. "No matter how much technology we have, the relationship with people will continue to be important," he concludes.
