The MSCI Similarity Score represents a significant evolution in wealth-management practice, aiding firms in balancing individual client needs with scalable processes and shifting perspective from a holdings-based analysis to behavioral similarity. 

Scenarios are a way of positing the material risks that arise from the combination of events and market vulnerability. The core of understanding risk, the task of building scenarios, is not mechanical and is not trivial. It is alive as a narrative. 

Mean-variance optimization is difficult to customize for a heterogeneous set of clients.  Modern technology can help advisers move from machine-driven optimization to guided rebalancing that respects market realities and client objectives.

Risk management for individuals and other asset owners differs from that of financial institutions. It’s time for a fresh mindset and new tools for these market participants. The authors propose measuring material risk through agent-based models.