Philippe De Brouwer

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Philippe J.S. De Brouwer, born February 21, 1969, in Leuven, Belgium, is a European investment and banking professional and a finance academic. He earned a PhD from Vrije Universiteit Brussel and works in investment management and financial risk management. He has ties to the University of Warsaw and collaborates with Vlerick Business School, while also working in risk management for a large bank.

De Brouwer is best known for solving the Fallacy of Large Numbers, a puzzle about investment advice first posed by Paul A. Samuelson in 1963. He also developed the Maslowian Portfolio Theory and the related Target Oriented Investment Advice. He argues that modern investment guidance should consider human needs and goal-oriented planning, not just traditional measures of risk and return.

Shortly put, the Fallacy of Large Numbers questions why advisers recommend safer assets for short horizons and riskier assets only for longer horizons. De Brouwer showed that when you account for loss aversion and asymmetrical utility, it can be reasonable to accept a series of bets under certain conditions, challenging some standard financial theories.

The Maslowian Portfolio Theory suggests that investors with non-monetary life goals should hold separate portfolios for each goal, each optimized with its own risk parameters. This leads to a broader framework called Target Oriented Investment Advice, which uses data and decision-analysis methods to tailor portfolios to individual aims.

In practice, De Brouwer has critiqued the traditional mean-variance approach, arguing that volatility is not a perfect measure of risk and that a single universal utility function does not fit all investments. He recommends starting from an individual’s risk profile and goals, using multi-criteria decision analysis to guide choices.

Throughout his career, De Brouwer has worked with major financial institutions including Deutsche Bank, P&V Assurances, Fortis, KBC Bank, Royal Bank of Scotland, and HSBC, and he became CEO of Warta TFI and Warta Asset Management in 2004. On April 27, 2017, Belgium named him honorary consul, a role focused on assisting Belgian nationals abroad.

He has also written about data science and its use in business, including practical guides to R and topics like statistics, machine learning, and big data, aimed at improving personal and shareholder value.