I have worked in the financial services industry for well over 30 years now (yes, all my working career). From time to time, something happens that makes me look back at 'how things used to be'.
The financial markets and the world used to be a lot simpler. There were several main local and global investment opportunities and diversification was easy - property, fixed interest and shares. As with everything else, the world has sped up and become more complicated.
As professional financial advisers we are continually learning about new financial solutions, changes to the regulatory, economic and financial environments. It is our job to sift through the multitude of information sources, products, press releases, research reports, economic updates and work out what it all means. We then need to apply this information and our knowledge to our clients personal sltuations.
Although we subscribe to and have access to a number of research providers (farrellys, The Pain Report, Lonsec and Morningstar), we still need to apply that information. In addition, we have numerous offers each week to participate in online workshops, conference calls, briefings and we receive around 10 different newsletters from different sources each week.
Fortunately, in Australasia, we are privileged to have access to the Portfolio Construction Forum. Established and operated by Graham Rich and Deidre Keown, this world leading forum provides education, conferences, research papers and accesses world leading thinkers and commentators.
At Moneyworks, attendance at at least one of the conferences is a key requisite for us. Historically Peter and Carey have aimed to attend the February one day briefing in Sydney to set the scene for the next 12 months. In recent years, Portfolio Construction has been running a New Zealand symposium in May each year. This year, it really hit its stride, with an outstanding programme, really adding value to our knowledge, thinking processes.
The conferences are in high demand and numbers are limited (Australia at around 550 people, NZ at 250 people.) The New Zealand conference in May this year surpassed previous investment conferences held in New Zealand. This year, we were fortunate that Paul Swarbrick, our associate who is training for his Authorised Financial Adviser status joined us. For a number of years now, we attend these conferences in conjunction with our colleague - Janet Natta, from SmartMoneyAdvice in Cambridge. We work closely with Janet and she joins us to form our investment committee.
The first day had a rapid fire consecutive 15 sessions of 20 minutes each from 7am until 9pm.,These included:
1.The global economy is firing on all cylinders
2.Get used to low interest rates
3.Don't ignore the tech sector for growth investing
4.Asset allocation will dominate portfolio returns in the years ahead.
The second day (from 7am until 4.30pm) was a day of specialist panels and workshops. The workshops enabled us to drill down into more specific topics and to discuss issues with other market participants. Topics included:
1. Engaging NZ companies on governance will improve outcomes
2. NZ Fixed interest - picking the highest yield is not enough
3. Multi-manager global equity portfolios needn't be low active share
4. Harness India's growth by investing before the crowd
We were extremely proud that Janet was one of two advisers asked to participate in an adviser panel on her 'key takeouts'. (Janet is on the left hand side of the picture). Tim Farrelly, who we follow closely with asset allocation decisions is also on the left. Janet provided some insightful comments to the audience that got us all thinking.
With four of us attending, we were able to attend different workshops, talk to different people in the breaks and we all interpreted different parts of the presentations in different ways.
The value of these sessions was highlighted in our investment committee meeting the following day. We confirmed the changes to our portfolios, addition of two funds, reduction of exposures to other assets, that we are communicating with our investment clients at their annual reviews or rebalancings.
Our main takeouts from the conference
1. The first photo in this blog shows the large photo of Jonathon Pain, we subscribe to his research. He is a commentator with a difference. He spends a lot of time in Asia, China and the Middle East and provides a different perspective. He holds a strong conviction that the global economy is 'firing on all cylinders' and that the outlook for growth is positive and strong. This has been reinforced by information that has come through since the conference.
2. Interest rates are likely to stay lower for much longer - great for mortgages, but makes things more difficult for investors.
3. India is going to be a powerhouse going forward, we are looking at options to provide some exposure to our clients in the future.
4. Oil prices are low, and because of political reasons, are unlikely to increase in the near future
5. Governance in New Zealand companies is improving, but has a long way to go.
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By Carey Church