Get to Know Dr Peng Chen

We are very delighted and deeply honoured to welcome Dr Peng Chen as an addition to our growing family!

Prior to joining Providend, Dr Peng had an illustrious career as the founding CEO of Dimensional Fund Advisors (Asia Ex-Japan), President of Global Investment Management Division at Morningstar and President and Chief Investment Officer of Ibbotson Associates.

With Dr Peng’s extensive background in the wealth advisory and investment management industry, we are excited to be working alongside him to elevate our advisory service as we approach our 20th anniversary in September this year and scale greater heights together for many more decades to come!

Learn more about Dr Peng Chen here.

Question 1: Please tell us a bit about your career history

I started my career after graduating a PHD program in the U.S. And I was very fortunate to find a job at one of the premiere asset consulting firms in the U.S. called Ibbotson Associates. And I started in the research department. You know, helped our clients to structure portfolios, finding managers and do better on reaching their financial goals.

Many of our clients are financial institutions and many of them serve individual clients. So a lot of my work started on the investment side but with the idea of helping individual investors reach their goal.

And then, after a number of years, we did pretty well based in Chicago. And at that time, Morningstar was really growing nicely and they wanted to increase their presence in the investment management and consulting area. So they acquired Ibbotson Associates and I went along with the acquisition. And ultimately joined Morningstar. And run the Global Investment Management and Global Consulting business for Morningstar for 6 years.

And then in 2012, a good opportunity came where Dimensional Fund Advisors is trying to build up their Asia business. And given that I have Asian roots, came from Asia, and I had always wanted to come back and live in Asia, and so I took the opportunity and came to Singapore to help Dimensional. Actually to lead Dimensional’s team to build our Asia business. And we grew our business from zero to a presence in almost 10 different countries. And we built a team of almost 50 people, based in Singapore and Hong Kong.

And then about a year and a half ago, I decided to take a break from corporate life. And so here I am.

Question 2: Of the many awards you won, one of them is the U.S.’ Retirement Income Industry Association’s 2012 Academic Thought Leadership Award. Can you briefly share with us what is it about?

That particular award is given to a paper I wrote with a couple of colleagues at Morningstar. And the paper is related to how to generate retirement income from a retirement portfolio.

And as you know, many people around the world, in Singapore, in the U.S. or in many other countries, when they save and invest, one of their primary goal for those activities – saving and investing – is to have a comfortable retirement. Be able to provide the income they need in retirement. And so in the U.S., that need is very big, as that’s in Singapore.

The paper we looked at was very specific. As I mentioned, helping investors understand how to convert a portfolio into a stream of income. And back in the day, when people talked about generating retirement income through a portfolio, they often talked about the 4% withdrawal rule. And although that’s a pretty decent starting point, one of the things we found out is that it’s very inflexible.

You know retirement is a long period and there are many variables that involve uncertainty. For example, market returns and so forth. And so we thought we can do a little bit better by developing a dynamic spending rule. Very much like what people would do in real life. When you go into retirement, they start spending certain amount or drawing a certain amount of income. But as time goes by, market returns and so on and so forth, they will adjust their behaviour.

So we try to capture that adjustment and that dynamic behaviour. And using a later foundation with the model and it came out alright. And our hypothesis was that by dynamically adjusting the spending levels will provide a better outcome, a better experience to the end investors.

And in the end, we sort of illustrate that indeed, it will be the case. So that’s what it is. And if I look at that paper, it’s one of the first that is looking at dynamic spending and I think it moves people’s discussion in terms of how to best generate income forward a few steps. And that’s why we got the award.

And I’m also very glad when I came to Singapore, I actually found out that at Providend, we also have a very solid solution called RetireWell. It’s exactly the type of solution that I was looking for that helps investors generate retirement income from portfolio. And I was very happy to work on that and help Providend to continue to improve that.

Question 3: You were also named to the Investment Advisor list of the “25 Most Influential Individuals” in 2008. How did that come about?

So Investment Advisor magazine is one of the popular magazines targeting independent and captive financial advisers in United States primarily. And while I was at Ibbotson Associates and Morningstar, although our primary audience is financial institutions, we do have a large number financial advisers, particularly fee-based financial advisers that follow our work and our research. And over the years when I do research papers for institutions, I’ve always tried to create a sister piece that uses slightly different languages and tried to relate it to the fee-based financial advisers. And tried to help them navigate through investment landscape and so forth.

And in 2008, they just gave me the award without telling me anything. So I didn’t ask them. It’s a nice recognition to me, but also more importantly to Ibbotson Associates and Morningstar. Because at that time, I was the CIO and the President of Morningstar’s Investment Management Division.

So if you ask me why, I think it’s more of a reflection of the work I did to help financial advisers, particularly fee-based financial advisers, understand how to structure portfolios, how to focus on long-term investing and so on and so forth.

And looking back, I’m really glad I did it. Because even though our primary audience was financial institutions, but I built a lot of good friends and relationships with the adviser community in the U.S. as well.

Question 4: Given all your achievements and experiences, can you share with us what do you hope to do for Providend as its Senior Advisor?

So when I decided to take a break from more corporate life, I didn’t have a plan in terms of what exactly I wanted to do. But I know there are a few teams or companies, for the lack of a better word, I really respect and admire what’s going on there. And if allowable, I would like to be closer to them. And Providend is one of them.

The reason is because Providend is built on the principle of doing the right thing for the clients from day one. And it was not easy. You know, for everybody who understands a little history of Providend in terms of where they come from and the challenges they dealt with over the past 20 years or so. So I have a lot of respect to Chris, Evelyn and everybody involved.

And so when I decided to take a break, I called Chris and said, “Look, I really like to work closer with you guys now that I have some freedom, both in terms of time as well as what I do”. And Chris thought about it and welcomed my involvement.

So in terms of the Senior Advisor role, the way I look at it is really from a few different areas.

Number 1, I am a subject expert because throughout my career, even though I’ve been on the business side, but mostly I’ve been on the investment side. And so, I can help Providend’s Investment Team to think more broadly, thinking over time, you know, how to best serve their clients and leverage different pieces. And we’ve already started to do that. So that’s really exciting for me.

Number 2 is that I’ve been around the industry for quite some time, working with institutions, advisers. And I’ve been both on the investment side but also on the business side. As you know, I’m not shy about giving my opinions or things, so I work very well with Chris and Evelyn and the Senior Team. So sometimes I give advice in terms of strategic directions of the firm, what we should focus on and what we shouldn’t focus on.

For the most part, Providend is doing very well in that department so I don’t really give too much advice, but I’m really happy to be part of it.

And then lastly, you know even though we have a great investment solution, at the end of the day, we have to deliver that to the clients and make sure the investors have a great investment experience. So I’m also involved looking at, you know, improving RetireWell  as well as many other solutions that we’re discussing internally offering them to clients.

And I’m really happy to be a part of that because at the end of the day, Providend is built on a great foundation, as I’ve mentioned, and that draws everybody here. We have a good Investment Team, offering good investment solutions. And if we can, you know, improve the investors’ experience over time, and that’s kind of the complete package there.

So those are the 3 things I do with Providend.

We do not charge a fee at the first consultation meeting. If you would like an honest second opinion on your current investment portfolio, financial and/or retirement plan, make an appointment with us today.

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