The FundForum Day Two Round-Up Report
FundForum Day Two focused on managing uncertainties and engaging clients. How does Asset Management, as an industry, can cope with hidden risks and prepare for new opportunities? The plenary sessions focused on 3 main challenges: 1) attracting long term savings, through what channels? with what vehicles ? 2) engaging into specific projects, and 3) identifying geopolitical risks and their impacts.
Exceptional speakers forced us to think ahead and challenge our mind-set. Caspar Berry who explained us today that we HAVE to embrace uncertainties to be successful! Second was Kathryn Koch at Goldman Sachs Asset Management, who set up the GS10KWomen program to fill the credit gap of women selected projects around the world, imply because this kind of credit support triggers economic growth, not for pure charity! And because women are better at re-injecting money to support the family! Jin Liqun from China international capital corporation, explained that China sees the world as a model to replicate but with an objective to avoid replicating failures.
And last the exceptional panel of Dr.Philippa Malmgren and Anne Richards (Aberdeen) who embarked FundForum International 2014 into the unknown geopolitical risks, and gave a strong wake up call! Watch out for the unknown risks and opportunities!
Finally, one should notice the round of applause and energy triggered by Michael Clements, fund manager at Templeton Investments, winning the “New investment Ideas Forum”, among 6 other managers. Why? Because he simply talked about the strong internal team culture AND the fact that the team has learned from its investment mistakes! Honesty can pay!
The Key Themes Broken Down
LEADERS’S PSYCHOLOGY WAKE UP CALL
Caspar Berry an old veteran in risks analysis and analysing psychology during decision making process. He was a poker player for many times and advises leaders on strategic thinking. His 20 minutes speech was all about gaining confidence, showing confidence and especially dealing with tomorrow’s uncertainties. “What if you would know everything on tomorrow: who you will meet? How and when you will get a new job? Your day of retirement? Your day of death? That would be so boring to live this life”. Therefore, the key to success and dealing with uncertainties is about accepting the unknown.
He also outlined the fact that leaders repeatedly fail. Abraham Lincoln, according to Caspar Berry, is someone who has failed many times in several key elections during 20 years, before eventually becoming President of the United States.
THE PRACTICALITIES OF GETTING SOCIETY TO SAVE MORE
The panel addressed the issue of getting active client engagement on long term savings. With the impact of demographics and longer life, the issue of long term savings is crucial.
Danielle Press, the CEO of the Australian Equipsuper, explained how they have strategically decided to target end investors with a systematic approach. “Engaging clients, talking to them on a regular basis and guiding them in their long term saving plans, were successful factors for us”.
The CEOs of Robeco, Principal Global Investors and Nordea were invited to share their views on new ways to outreach individual long term savers:
- Partnering with an e.commerce platform could become an option to access larger range of customers, including young people.
- Facebook is supposed to work on obtaining a bank licence in Ireland!
- However e.commerce platforms are in general good to reach local markets
The wish list of the CEOs on the panel:
- A more tax friendly environment for retirement plan
- A recognised standard mobile retirement vehicle as known as the UCITS brand
- To support long term investing
THE REGULATORS & CUSTOMERS
Thomas Seale, the lively CEO of European Fund Administration entertained FundForum by distributing country football scarfs to each member of his panel! Were presents the CEOs of East Capital, Bradesco AM, Jupiter, BNP Asset Management and Francis Jackson, MD Investor Services at JP Morgan. Representatives from the regulators: CSSF, Eurofinuse and OECD were also present to give their own perspectives. Thomas Seale was the referee in this difficult match between regulators and actors.
Thomas Seal asked the feedback of the audience on these key issues:
- SIFI (new terms for Shadow banking!) = Systemic Important Financial Institutions. Are asset managers or funds potentially SIFI? 67% said NO
- Will the big squeeze continue? 79% said YES
- Will EU have a standard defined contribution vehicle within 5 years? 67% said NO
- Is technology destructive for the asset management? 67% said YES
“Will Amazon and Google enter the asset management industry?” asked Paloma Piqueras, CEO of BBVA Asset Management. Some money market funds distributed on Internet were very successfully sold but the CEOS questionned this as a sustainable move. JP Morgan argued that the platforms are already providing the technology to access to some funds, so for Francis Jackson, the answer is not straight forward.
HOW CHINA SEES THE WORLD
Jin Liqun, Chairman of China International Capital Corporation, with a long experience in advising the Chinese authorities since the 1980s, explained the vision of the Chinese on the Western World.
- The first challenge is to define China: an economy, a society, a government?
- China has now a long history of engagement with developed countries.
- Developed countries remain the main influencers for China’s reforms.
- However the authorities want to avoid failures of developed countries such as some European costly social protection systems and the reduction of working time.
- Chinese consumers admire the European luxury goods and are a strong purchaser power: can China produce its own luxury goods at some stage?
- Chinese authorities value its relative financial stability to continue to work on its future