Category Archives: Pensions & Investments

What kind of relationship do you want?

What Kind of Relationship Do You Want? from Redington on Vimeo.

This is a video recording of my presentation to 150 fund managers at the RSA on 20th November 2015, at Redington’s Annual Manager Forum.

I talked about how we see our relationship with fund managers, our promise to be open/clear and what we expect in return.

In particular, I invited the fund management community into a strategic relationship with Redington, as we help our clients get smarter, make better decisions, save time and have greater confidence in achieving their long term goals.

Link to video – “What kind of relationship do you want?” (12:55)

Link to all 10 Prezi’s, PDFs and Videos from the Manager Forum

Controlling our Lizard Brain could help us make better decisions

AltMBA2 Lizard

Our brains have developed considerably since early primates diverged from other mammals about 85 million years ago. However, increasingly, behavioural psychology studies are showing us how one part of our grey matter has not changed: our ‘lizard brain’.

The lizard brain, or the limbic system (the thing keeping a lizard’s mind ticking), was used by early humans as a primitive ‘fight or flight’ response. It was also a mechanism for weighing up feeding and procreation options.

Fast forward several million decades, and it has been identified this prehistoric part of our brain is now central to the processing of our memory, decision-making, and emotional reactions. Increasingly behavioural science is examining how controlling your lizard brain can have a profound effect on the way we solve complex problems, from finding a life partner to making better investment decisions.

Quick-fix solutions

The lizard brain enjoys the short-term game. It prefers immediate and quick-fix solutions. It is more fearful of loss than hopeful of gain. This is great for low-value decisions like crossing the road or choosing a hamburger. But engage your lizard brain with anything more complex, and there can be disastrous consequences.

The problem is the framework of the lizard brain emphasizes a narrow spectrum of information; obsessing about previous data while discounting future uncertain indicators. This ancient structure exerts powerful and often unconscious influences on behaviour; and, in the world of investments, it may explain why experienced investors buy at irrationally high prices and sell at irrationally low ones. Lizard brain thinking may also lurk at the bottom of financial catastrophes.

Behavioural psychologists talk about the lizard brain being essentially resistance. It is that little voice in the back of your head, the one telling you something will never work; the one which worries people will laugh at you.  And when under pressure, with the stakes raised and people watching, rather than rationally appraising all the options, the lizard brain instinctively strikes. Behavioural research shows consistently employing an instinctive response in complex, high stake decisions has a negative outcome.

You can read the full article on YourMoney.com – http://www.yourmoney.com/investing/make-better-investment-decisions/

Can I help you to make change happen?

One way street

As many of you know I’m coming to the end of my one month course – Seth Godin’s AltMBA – which is all about “making change happen”:

  • It’s been a part time, one month long, online course run by Seth Godin and has taken up all my evenings and weekends.
  • It has been an intense, stretching and eye-opening experience (one more week to go).
  • It takes a very different approach of working, learning and collaborating. I think it offers a glimpse into the future of education. I have loved it and have learnt so much.
  • I’ve completed 11 projects over 3 weeks with 25 other people based in France, Ireland, South Africa, Nigeria, Singapore, Boston, New York, California, and India. (It’s taken up every morning, evening and weekend since 15th June).
  • I’m now into my final week with 2 final projects to go.
  • Here’s the application form for anyone interested in applying for a future cohort (you can give my name as a reference): http://goo.gl/forms/RR470HLG9q

For my final challenge (Project 13) I need to organize and run a live event to teach others what you’ve learned in altMBA. Seth’s brief is –

“Not everyone is able to do the course themselves. Sharing is a generous act, a gift. 10 people (minimum) must attend. It can be at work, at a group you’re part of, or for strangers. It can be offered free or with paid admission. But at least 10 people have to come, and you have to be in charge. It needs to take place no more than four weeks after the end of the altMBA. This is the culmination of everything we’ve learnt so far…”

I would really appreciate your input on this. I haven’t yet figured out whether to do this at work, at home or an independent venue; whether to do a 1 hour summary, a half day interactive workshop ora one week series of mini altMBA experience.

My question for you is –

Are you interested in attending? What would like like to get out of it? Who else do you think might benefit?
How much time do you want to give to it?
How deep would you like to go?

Please reply to this message or email me on ‘[email protected] with your thoughts.

For those of you who wanted to read one or two of my AltMBA posts they are all public; but to make it easier I have listed them below (and tried to categorise them):

General Business:

Project 12 – Launching the ‘Future Leaders’ program (3 minute video on helping others to make change): https://altmba.com/miteshsheth/launching-our-inaugural-future-leaders-program/

Project 11 – Death is not the end it is just a shedding of skin (What if Apple did Savings & Investments): https://altmba.com/miteshsheth/death-is-not-the-end/

Project 7 – I have a problem with Hierarchy (Organisational Change): https://altmba.com/miteshsheth/i-have-a-problem-with-hierarchy/

Business Development/Sales:

Project 8 – We are all in Sales and we haven’t got a clue (Closing the Sale when decisions are irrational): https://altmba.com/miteshsheth/we-are-all-in-sales/

Project 5 – Be the change you want to see in your clients (Inspiring change): https://altmba.com/miteshsheth/be-the-change/

Project 4 – You were right to choose the competition (Understanding worldviews and empathy): https://altmba.com/miteshsheth/right-to-choose-the-competition/

Redington/Pensions & Investments:

Project 12 – Launching the ‘Future Leaders’ program (3 minute video on helping others to make change): https://altmba.com/miteshsheth/launching-our-inaugural-future-leaders-program/

Project 5 – Be the change you want to see in your clients (Inspiring change): https://altmba.com/miteshsheth/be-the-change/

Project 4 – You were right to choose the competition (Understanding worldviews and empathy): https://altmba.com/miteshsheth/right-to-choose-the-competition/

Project 2 – What is the difference between a dream and a goal (7 steps to Goal Setting): https://altmba.com/miteshsheth/dreams-vs-goals/

Project 1 – Make better decisions in 5 minutes (using decision trees to decide what to do if a star manager leaves): https://altmba.com/miteshsheth/make-better-decisions-in-5-minutes/

RedSTART/Saving/Financial Education:

Project 10 – If you don’t stretch your limits you set your limits (How do our Assets, Boundaries & Narratives limit us?) https://altmba.com/miteshsheth/stretch-your-limits/

Project 5 – Be the change you want to see in your clients (Inspiring change): https://altmba.com/miteshsheth/be-the-change/

Project 2 – What is the difference between a dream and a goal (7 steps to Goal Setting): https://altmba.com/miteshsheth/dreams-vs-goals/

Personal/Spiritual:

Project 9 – He didn’t belong and that made him sad (How self-imposed constraints kill our dreams/How can we scale/leverage them)?: https://altmba.com/miteshsheth/he-didnt-belong/

Project 6 – Are you a guardian of the future? (Creating a campaign for change – Global Warming): https://altmba.com/miteshsheth/guardian-of-the-future/

Project 3 – 4 strangers, 48 hours and 101 ideas (Using Business Canvas to brainstorm 101 new business ideas) https://altmba.com/miteshsheth/101-ideas/

Hope you enjoy them. It’s hard to believe but each of these was written within 24 hours. I welcome your feedback; it’s a gift!

Don’t forget to send me your thoughts on what you’d like to get out a live event covering the ‘top tips for making change happen’?

Thanks,

Mitesh

15 top tips for a successful 2015

IMG_0899

I have jotted down my top tips for 2015 to help me remember the most important lessons from last year. If you are running a project, managing a team, leading a business unit, company or charity you might also find some of these tips useful.

1. Focus
2. Address conflicts
3. Consult widely
4. Be decisive
5. Don’t wait for perfect
6. Find brightspots
7. Challenge convention
8. Create new routines
9. Be prepared
10. Don’t underestimate people
11. Live by your strategy
12. Periodically step away
13. Zoom in / zoom out
14. Be flexible
15. Create assets

1. Focus: Don’t diffuse your attention over a dozen things.

As I have grown in age, roles and responsibilities I have had to take on an increasing number of goals, roles and jobs. In 2014, I found the power of focus. I decided not to diffuse my attention over a dozen things but pick one thing at a time to put all my energy into. When you apply all your energy, passion and intellect to solving one problem at a time, to delivering one outcome or achieving one goal, the results are incredible. There’s another benefit too that, with clear focus, others know what you’re working on, they can get involved, support and help you; they can also see when not to distract you; and it’s much easier to say ‘no’.

2. Address conflicts: to avoid confusion, loss of credibility and wider organisational disfunction.

Too often we are left to resolve issues that really should have been addressed at the top. So many things are left unsaid, unresolved and unaddressed despite people spending more and more time in internal meetings. Most of us would rather have polite meetings than have to face the discomfort of conflict. It feels difficult, destructive and disruptive to address the elephant in the room, even when everyone is aware of it. As Patrick Lencioni explains in The Advantage – What we often don’t realise though is that when leaders avoid conflict amongst themselves, they transfer it in far greater quantities onto the people they are supposed to be serving. We need to get better at addressing difficult issues, having difficult conversations and addressing conflicts to create momentum, clarity and loyalty.

3. Consult widely: but don’t wait for consensus.

It’s quite natural to wait for consensus before taking any action, in order to get proper support and buy-in. All too often though we end up with decisions that are too late and too mediocre. I have found that waiting for confirmation that a decision is right before making it is a recipe for disaster.
In 2014 I learnt that consulting widely and socializing an idea broadly is even more impactful than trying to get consensus. Most people will not actively commit to a decision that they haven’t had the chance to provide input to. However, they can rally around an idea that wasn’t their own as long as they’ve had a chance to debate and understand it.

4. Be decisive: overcome inertia and boldly deal with the consequences.

In the absence of clear decision making; confusion reigns, credibility is lost and the organisation suffers. It’s so easy to wait for others to make decisions or to avoid difficult decisions. We all hear people complaining about a lack of clear decision making. What I find incredible is how long people will continue to work in the absence of any clear guidance or direction, with little faith that the important decisions will ever be made. Often in these situations more than getting the right answer, it’s important to simply have an answer – one that is broadly correct and around which everyone can commit. In 2014 I learnt the value of being decisive – I still consult, test and socialise my thoughts – but I’m not afraid of making decisions and am happy to deal with the consequences.

5. Don’t wait for perfect: The pursuit of perfection is the real enemy of progress.

Whenever we are designing, writing, developing or changing something it is natural to seek perfection. We want to do the best. We want to hold on sending the document till it is perfect; we review and re-review our presentation and publications; we don’t communicate the strategy because it still has holes in it; we don’t share our values because it is always work-in-progress. I have found that striving for perfection causes huge inertia and ultimately frustrates everybody. We all know that we learn by making mistakes, even bad ones. By making decisions we allow ourselves to get clear, immediate and frequent data from our actions. We need to lead by example and foster a culture that encourages this.

6. Find brightspots: don’t just look at what’s going wrong.

In our day to day business of finding incremental improvements it is really easy to only look at problems, or what is wrong. Good teams try to analyse their mistakes so that they can learn from them. This is true and important. In 2014 I learnt that it just as important, if not more important, to also look for brightspots, to identify what going well, really well, and study the secret of those successes, in order to share them and replicate those successes again and again.

7. Challenge convention: just because we’ve always done it that way doesn’t mean we always should.

A culture is a way of working together that has been followed so frequently that people don’t even think about trying to do things another way. There is real power, speed and scale in having tried and tested habits. A culture is set through hundreds of everyday interactions. Once it is set it’s almost impossible to change. That’s no surprise given we all like the comfort of what we know and what we have always done. It only really becomes a problem when these old habits become outdated. We need a mechanism for periodically asking ourselves and each other whether our culture is fit-for-purpose, facilitating natural opportunities for challenge and creating mechanisms for change. Great teams and companies often disrupt themselves before others can come along and disrupt them.

8. Create new routines: it’s the most direct route to changing a culture.

In my experience if you have identified a problem, consulted widely, provided an opportunity to debate and found brightspots, then all that is left is to create new routines or rituals. These new routines, however small, can appear insignificant but can play a huge role in facilitating broader changes. There is no getting round the fact that change is hard and to succeed you have to persist. Our daily decisions about where we invest our time and how we respond to issues will reinforce this. Small and well thought out changes in routine are the first steps to facilitating bigger shifts.

9. Be prepared: failure to prepare is to prepare to fail.

We all know that with pitches and presentations just taking the time to prepare, to script, to rehearse and seek feedback can lead to a tremendous improvement in success rates. Great speakers and presenters don’t just ‘wing it’, they prepare till its spot on. This year I have learnt to take the importance of preparation in all aspects of my professional, charitable and personal life. My boss (Robert Gardner) comes prepared to every meeting; he has a mind map ahead of every conversation we have. Working with him has taught me to prepare for every meeting I have with him. It’s not long before you see the benefit of thinking ahead and I have started to apply it to every meeting and every conversation I have.

10. Don’t underestimate people: take time to understand them and to develop them.

The ‘right stuff’ that most companies look for is not a superior set of skills that someone is born with but skills people have honed through life’s experiences. Companies focus too much on the grades, trophies and accolades someone has. Over the years I have found that lots of people that have become ineffective or perform poorly are in the wrong role, are not understood, or not well managed. I truly believe that everyone needs to be given a chance to shine in their area of mastery, skill or expertise. In recent years I have learnt not to accept other people’s perceptions and judgements; but to understand people better myself, to look carefully for whether a person has wrestled with the problems you need them to tackle and to create these learning opportunities. As Clayton Christensen says “management is amongst the most noble professions as it offers more ways to help others learn and grow”.

11. Live by your strategy: Carefully choose how you will spend your valuable time, effort and money.

A strategy is not just a one-off, high level plan, created in board rooms and then forgotten till the next year. A good strategy is created through dozens of everyday decisions about how you spend your time, energy and money (how you allocate your limited resources). With each of these decisions we make a statement about what really matters to us. We need to avoid giving our limited resources to whoever shouts the loudest for our attention or wherever the need is most urgent. If your team are important to you then invest in their development; if learning is important then make time to learn; If your family are important to you, ask yourself how often family comes out top in all the choices you have made in the past week. As Aristotle famously said “We are what we repeatedly do, excellence then is not an act but a habit.”

12. Periodically step away: don’t overestimate your impact, allow others lead the way.

Over the past 12 months I have tried to be home for most of the school holidays. Initially I worried that this would make it hard to manage my workload, team, clients and deliverables. It’s actually turned out to be a blessing. Having to be away for a longer period of time forces you to train and coach others. It also gives others the space to fill your shoes and to step-up. I have found that getting some space, stepping away periodically critical to developing a team of leaders.

13. Zoom in & zoom out: we need to check we’re going in the right direction

Our first accomplishments as professionals are usually rooted in our skill in getting things done. We’re fast, we’re efficient, and we do high-quality work. However, to lead effectively often we need to do less. We need to go from being firefighters to being fire marshals, taking a more strategic approach to the business, and solving problems before they become crises. Whilst we all need to be able to get our head down to make sure we get stuff done, we equally need to periodically lift our head up to keep checking were going in the right direction. We need to learn how to both zoom in and zoom out regularly.

14. Be flexible: Work does not need to happen between 9-5pm at the desk.

There are times you need to be in the office from 7am – 9pm and there are times you are better off at home. In the concept/strategic phases of any project I find it’s better to not be in the office. In the socialization/implementation you absolutely have to be in the office. In the insights/feedback phase you need to get out of the office and speak to clients/stakeholders. I think the idea of working 9-5pm in the office everyday is out-of-date. We need to have shared goals and work towards them sincerely and above all flexibly to get things done best in the most sustainable way.

15. Create assets: Don’t just do a job, build process and turn them into assets.

Our teams need our time and attention but above all they need processes. All businesses and teams need ‘processes’, habits and routines to convert scarce resources into something useful. They need to learn routines for how to solve problems themselves, how to deal with mistakes, how to build client relationships, etc. They also need values and ‘priorities’. This defines how they will make decisions, what they will invest their time and resources in and what not. The best way of developing processes and priorities is by helping them solve hard problems for themselves. When we do this systematically we create assets, that are not dependent on us, that make the company or team more productive and more valuable.

2013 was a year of ‘discovery’ for me – listening to my calling, having faith, being bold. 2014 was the year of ‘devotion’ – I made a conscious choice about where, when and how I was going to devote myself, my time and my energy.

As I look forward to 2015 I don’t yet know what it holds for me. It has started as a year of sacrifice and giving. I feel excited by the possibilities as I am a whole year older and wiser. The best part of starting a New Year is that it is still unwritten and it is full of potential waiting to be released. I wish you all the best in maintaining focus to stick to your goals and resolutions, in learning from previous mistakes, in building upon previous successes, to create new routines, build new processes and to make 2015 a fantastic year.

Best wishes for the New Year.

P.S.

Now that the year is over I wanted to look back, review and reflect on my top 15 from 2015:

1. Focus — We all know that if you spread yourself too thinly you don’t progress anything properly. This year I learnt that though you may focus on one major thing at work (you can juggle various smaller things too). Also you still have capacity to focus on one major thing at home, one in your leisure time, etc.

2. Address conflicts head on — I tend to deal with the most difficult problem first and this year was no exception. What I learnt this year though was that most of our brains’ natural tendency is to put off or avoid difficult situations. Acknowledging this is a powerful first step.

3. Consult widely — I knew people want to have an input, contribute and be consulted, even if you don’t end up taking their suggestions on board. What I’ve realised this year is that actually many brains are better than one, and people will highlight things you would never have considered.

4. Be decisive — It’s so easy to procrastinate over a difficult decision. I’ve really learnt the value this year of “shipping”.

5. Don’t wait for perfect — I am not a perfectionist, but I definitely spend too long thinking about and working on presentations and reports. I’ve learnt it’s better to just get out a version 1, so you can get feedback and iterate on versions 2, 3, 4…

6. Find brightspots — I still need to work on this. I find it much easier to identify problems, point out shortcomings and criticise. I need to make it a habit to praise and acknowledge successes and brightspots daily.

7. Challenge convention — there’s a balance to challenging the norm. At one extreme you become a troublemaker, at the other end you’re too compliant. Like everything I’ve realised this is a matter of picking your battles.

8. Create new routines — I’ve struggled. I’ve allowed old routines that I really value to fall away. I haven’t been able to make new routines stick. This will need overhauling in the New Year.

9. Be prepared — I have been preparing a lot more for presentations, meetings and even conversations rather than just ‘winging it’ this year. It’s a really valuable habit.

10. Don’t underestimate people — the most unlikely people have surprised me when given the opportunity. What I’ve realised though is that they may need some support and coaching to really succeed.

11. Live by your word — it’s no good saying something is important to you if your actions don’t demonstrate it. I’m very conscious of this.

12. Periodically step away — the value of this has been really clear this year. Every time I stepped away, or went on holiday, my team really stepped up and shone. We need to do this systematically. It’s is the key to delegation.

13. Zoom in / zoom out — when faced with a problem it’s easy to dive further into the details but it’s a combination of stepping back to get perspective, alongside diving in that creates new solutions.

14. Create Assets — I have caught myself every time I get too consumed in delivery. I have consciously stepped back and tried to create processes, routines and assets for my team. We could all be even better at this, even at home with our children.

15. Work flexibly — I’ve been awful at this in the past 6 months working every hour I can. I want to plan my time better and work more flexibly next year. Moreover, I want to leave at 5pm at least 3 times a week so I can have dinner and do bedtime with my family.

I look forward to starting fresh in the New Year, with new lessons learnt, with new resolutions and new habits to create. Change is the only constant.

“If you do what you’ve always done, you’ll get what you’ve always got.”

The essential C-word in Investment Management

Over the past few years, a number of previously successful asset management firms have blown up spectacularly, unexpectedly tripped up, or surprised us all with how fast they have unravelled. Over the same period, however, relatively unknown players have risen to prominence, and some managers have continued to succeed despite serious knocks. What’s the difference between them?

Extract reproduced from June 2014 edition of IPE: http://www.ipe.com/reports/top-400-asset-managers/top-400-the-essential-c-word-in-investment-management/10002043.article

Busy office culture

For years, I have been trying to answer this question: how to identify those investment managers most likely to fail in advance of their demise?

At Redington, we speak to fund managers, CIOs, CEOs, academics, researchers, clients and colleagues continuously in an effort to determine the key drivers of asset management success and failure.

The most oft-mentioned success factor is culture, although people rarely use that word. Indeed, culture is something of a dirty word in asset management; it is not one that asset management teams talk about, and it is used less by clients and advisers. However, its impact is underestimated until too late. Executive committees at investment management companies spend hours and days discussing incentive schemes, team structures, titles, reporting lines, risk management and regulation. However, if someone mentions culture, a deafening silence ensues.

It is understandable that this factor is ignored and sidelined, given the analytical and inherently cynical nature of most fund managers. Frankly, there is little consensus on what (corporate) culture is, let alone how to influence it and how it affects behaviour. Having said that, culture is not as intangible as many people believe. In my experience, there are plenty of clear, measurable and critical elements of culture that are quite tangible indeed.

Culture is embedded in the unwritten rules colleagues tell new joiners – ‘this is how things are done around here’ or ‘we have always done it this way’. Culture is a set of repeated habits, rituals, narratives and expectations that govern how people do things in organisations, and are based around the inherent values of decision-makers. Culture is a control system that carries the behavioural norms that must be upheld, and determines the social consequences for those that do not stay within the boundaries.

It is not surprising that the UK’s new regulator, the Financial Conduct Authority (FCA), has shown a keen interest in the culture of financial services firms. “Culture is the DNA of the firm,” Clive Adamson of the FCA has said, noting that it shapes “how decisions are made at all levels of the organisation”. He is of the view that “in many cases where things have gone wrong, a cultural issue has been at the heart of the problem”.

Cultures can evolve naturally, be driven by role models or by a management team. Culture is usually carried by leaders, long-serving employees, historical narratives, habits and routines. It is influenced by incentives and sustained through recruitment and management of staff, the induction of new people, and through appraisals and discretionary rewards. Large organisations can have multiple sub-cultures that should not be ignored – the legacy of cultures within acquired units can persist for a surprisingly long period of time.

In my experience, there are 10 dimensions of culture that are critical to determining success, or failure in fund management. These are listed below, each expressed as a spectrum:

  • People focus: Is the business long-term people oriented or short-term results oriented?
  • Star culture: How are successful managers treated? How are support people treated?
  • Self-orientation: Are portfolio managers loyal to themselves, their teams or the company?
  • Conflict tolerance: Are people expected to agree or is conflict and challenge encouraged?
  • Risk culture: Do employees tend to ask permission for everything or do they feel empowered to take risks? Are people trusted or is someone always watching?
  • Approach to failure: How does the company deal with errors, mistakes and failure?
  • Job security: Do people feel secure in their jobs, are they motivated to excel or avoid attention and ‘stay out of trouble’ motivated by career risk?
  • Success definition: Is investment performance, client retention, net sales or share price appreciation the ultimate measure of success?
  • Competition: Are individuals/teams incentivised to collaborate or allowed to compete?
  • Abdication risk: To what extent are problems and issues escalated upwards, or do employees feel responsibility for dealing with issues?

This list is not a ‘yes’ or ‘no’ checklist. The key question is not absolute value or exact position of the firm on any of these cultural questions, but how aware and in control of the culture a management team is. What is particularly interesting when assessing asset manager riskiness is how their position on each of these issues fits together, how the culture has changed or is changing, what new employees are sold, what clients expect and whether there is a disconnect between the leadership and the people on the ground.

A year ago, my new client (now employer) Robert Gardner, founder and co-CEO of Redington, asked me to help develop a system to identify and communicate early warning signals that should be monitored by clients, in order to assist decision making around the engagement with, and timely removal of, managers.

After research and deliberation, 10 early warning signals presented themselves. These have now been developed into a system through which we aim to understand what might go wrong with a manager before any assets have even been allocated to them. We monitor and report on these critical issues on an on-going basis to help clients avoid being caught by surprise.

These 10 key risk factors are:

  1. Business focus on asset gathering and short-term priorities
  2. Increased dependence on a single client or channel (asset persistence)
  3. Weak leadership
  4. Misaligned incentive structures (prioritising asset growth over investment performance)
  5. Increasing key person dependence
  6. Product proliferation and business complexity
  7. Process drift or moving away from core skills
  8. Poor capacity management
  9. Undisciplined growth implications for operational infrastructure
  10. Lack of challenge and accountability.

These are not a series of boxes that need to be ticked or crossed. Instead, they are considerations that help us to understand how a fund management company measures and rewards success, whether a portfolio manager’s interests are aligned with the clients.

It’s early days, but the FCA seems to understand that organisational culture is hard to change and it takes persistence. The responsibility lies with every employee, led by the senior management, and cannot just be delegated to the compliance, or HR department. To change deeply embedded behaviours, senior management have to support the right behaviour through rewards, performance evaluation, employee development and their own actions.

Investment management is a complex business, and it is vital that consultants help clients to understand the various moving parts and key drivers of success or failure. The truth is that every institution, no matter how large, is vulnerable to failure; fund management companies can look strong on the outside despite being sick within.

While it may not be not possible to determine the fate of every firm, we assert that early symptoms, and even underlying causes, can be detected and can be avoided. The challenge is to talk more openly about the C-word, understand corporate culture better and embed on-going assessments of whether an investment manager’s culture is aligned with its clients, and whether it risks creating a negative loop that could drag it downwards.

Click here to read the full article in the June 2014 edition of IPE: http://www.ipe.com/reports/top-400-asset-managers/top-400-the-essential-c-word-in-investment-management/10002043.article

When to fire your fund manager

I spoke about “Knowing when to fire (& when to retain) your fund manager” at Fund Manager Selection 2014 this week.

Here’s a link to the Prezi.

I’d love to hear your thoughts on this.

What are the most important red flags for you? Are there other early warning signals you look for?

What will you devote yourself to this year?

IMG_0781

As we enter 2014, and the Earth moves around the Sun one more time, I have found it invaluable to reflect on the past 12 months in order to learn lessons and move forward in the coming year.  The New Year is as good a time as any to ask ourselves: What shall we devote ourselves to? What will be the focus of our time, enthusiasm and energy this year?

In my first blog of 2013 I wrote about looking for inspiration from my Heroes, in their calling, their choices, their determination, their attitude toward obstacles and their incredible achievements (link). As this New Year begins I have to ask myself – Was I brave? Was I bold? Did I face my fears? Did I have faith in myself? Did I embrace adversity? Did I find my calling? More on this later.

My call to action

12 months ago, I had my own ‘call to action’. I left paid employment and entered the uncertain world of self-employment in the hope of spending more time with my family. I was clear that I wanted to spend more time in the next 5 years with my wife and children than I had managed in the previous 5 years. It is so easy to take family for granted, even though we know that they are our greatest source of happiness in life; family doesn’t offer the immediate rewards, recognition and feedback that our careers do.

Clayton Christensen explains it well – “The priorities in our life are determined not by our words but through the hundreds of everyday decisions about how we spend our time, energy and money. With each of these decisions we make a statement about what really matters to us.”

As I entered 2013 I knew the most important job that I needed to do right now was to be a better husband and father. I have felt this many times before and even made countless resolutions in the past to re-address this balance, but 2013 was the first time I was actually going to do something about it. This felt like a moment that might define who I am, that might give me an opportunity to use my talents and to fulfill my purpose on Earth.

However, I hadn’t figured out how I would support this new lifestyle, what kind of work I would do to sustain it and how I could earn enough to cover our expenses. In this vacuum I found myself transported back to the year 2000 when I was trying to decide between earning a living by pursuing my passions and doing something I was good at or a career that were in demand. All sorts of ideas, long forgotten dreams and possibilities filled my head – I could finally become a schoolteacher, author, film director, innovation guru, entrepreneur, etc.

I read a book about “How to find fulfilling work” that just made my predicament worse. I was torn. On the one hand I wanted to be like Leonardo da Vinci – a wide achiever – and pursue many interests all at once. On the other hand I knew I have a tendency to spread myself too thinly and then struggle to do anything well. After much mental wrestling it dawned on me that my biggest successes and achievements in life have come when I have immersed myself in one field and focused all my efforts in one direction, blocking everything else out.

Self-employment and self-discovery

It took so much effort to not get distracted and I had to keep reminding myself of the work-life balance I was trying to achieve. I decided to develop a one man consulting business where I could choose to take on interesting projects during term-time to ensure I was free for school holidays.

I attended a one-day Penna course on ‘Setting up your own consulting business’, I set up a limited company within an hour – Mitesh Sheth Consulting Ltd was born – it all seemed surprisingly easy. Getting clients, however, especially ones that would pay proved to be significantly harder. It took me 3 months to get a handful of clients, from different industries, offering me a broad mix of projects. It took a while though to figure out that I was better off earning my income through the industry I know best – pensions & investments.

Throughout my life I have always thought that there is nothing better than your own boss, but this year I have realised that self-employment is not for everyone (the lack of cashflow visibility at least in the initial period is difficult) and also working on my own was not for me (I’m an extrovert and it felt pretty lonely).

2013 has been a  year of self-discovery for me:

  • I found out that, whilst I loved being at home with my family in the mornings and evenings and during the school holidays, I didn’t like sitting around at home for long periods of time.
  • I realised that I am very ambitious, I love challenges and get tremendous self worth from achieving things.
  • I am also naturally inquisitive and love learning (I’ve read over a dozen non-fiction books this year – link).
  • I like people, especially being surrounded by smart people that challenge me. I am also a rule breaker and disruptor and needed to find a way to channel this constructively.

Finding my ‘Tribe’

The concept of ‘Tribes’ was popularized by Seth Godin in his bestselling book of the same name. He explained the concept as follows:

“Everyone has an opportunity to start a movement – to bring together a tribe of like-minded people and do amazing things. There are tribes everywhere, all of them hungry for connection, meaning and change. And yet, too many people ignore the opportunity to lead, because they are “sheepwalking” their way through their lives and work, too afraid to question whether their compliance is doing them, their family, their company and the world any good.”

Enter Redingtonhttp://www.redington.co.uk – an award winning disruptive pensions and investment consultancy co-founded by Dawid Konotey-Ahulu and Robert Gardner 7 years ago to ‘solve the pensions crisis’. I realised that this could be my working home as soon as I heard Rob’s 100 year vision to help people around the world feel confident about their financial future (link). My initial engagement with Redington started with RedStart, a groundbreaking programme that offers free financial education to young people at school. I then got involved with the Manager Research Team and have recently accepted a permanent role as Director of Strategy.

The more time I have spent with Rob, Dawid, Pete and the rest of the Redington team the more it has become clear that I have found my ‘Tribe’ – this is a group of talented and smart people who are ambitious and altruistic in equal measure, blending rigorous analytical discipline with creative flair.  Having spent Christmas at home with my family I am really looking forward to going back to being part of this Superteam (in the words of Khoi-Tu).

Final reflections

Back to those difficult questions I was asking myself earlier. In 2013 was I brave? Was I bold? Did I face my fears? Did I have faith in myself? Did I embrace adversity? Did I find my calling? I am pleased that for the first time in many years the answer is a yes to most of these questions, with the exception of the last one.

I have not found my calling yet, but I found my tribe, which has to be the first step.  For 2014, I want to make a commitment (not just a resolution) to continuing on this path of self-discovery, seeking to understand  where to focus my energy better and what to devote myself to. 

2013 was an amazing year for me on so many levels, even though it did not feel like it along the way. I will always remember it as my year of self-discovery. I want to share the key to unlocking this internal exploration: daily introspection and journaling.

My resolutions for 2014

I am 14 years from turning 50, I don’t have the luxury of time to waste by just re-living the same year over and over again. If 2013 was the year of ‘self-discovery’, 2014 will be the year of ‘devotion’ for me.

Over the past couple of months my wife and I have started a 5am routine: We wake up and do Surya Namaskar (Yoga & Pranayama) for 20 minutes, then we both write a Journal (reflecting on the previous day and our goals) for 20 minutes and finally we read something (thoughtful or inspiring) for 20 minutes. This routine has been invaluable in helping me deal with this year’s uncertainty, embrace adversity, adapt, understand myself and retain focus on my priorities.

  1. This 5am routine continues to feature front-and-center of my plans for 2014 (‘Daily routines of rock stars’ link).
  2. In 2014 I am looking forward to helping Redington grow with new clients, in new channels and new markets.
  3. After reading Outliers by Malcolm Gladwell and learning about the massive differences that are forged between children over the school holidays, I have committed to spending school holidays at home with my children.
  4. I will use my free days but to write more this year. I started writing a blog for the first time in 2013 and I have really enjoyed it. I have written 19 blog posts and had 7,865 views. I really love writing. I am going to do more of this in 2014.

I’d like to thank all of you for your advice, guidance, support and encouragement throughout 2013. I wish you and your families a very Happy New Year.

For 2014 I offer you the gift of introspection, and journaling in particular, and leave you with this final question:

What will you devote yourself (your time, your energy and enthusiasm) to this year?

Is it possible to identify good fund managers?

IMG_0767

I’ve been involved in identifying, assessing, hiring, developing and managing talented investment managers for most of my career. In 2004, I worked on an initiative, at my then employer, with some organisational psychologists to uncover ‘What are the common traits of the best fund managers?’. A decade later, my current project and the article in this week’s FTfm have brought the question of ‘what makes a really good fund manager’ and ‘is it really possible to identify them through manager research’ back to the surface of my attention. More broadly, I am fascinated by talent, excellence and what conditions help foster a high performance team.  I would love to hear your thoughts, experiences and observations on this subject.

Are manager recommendations from investment consultants really worthless?

I realised early on in my career that the traditional manager research process, as it is most commonly executed, was flawed. So, I have some sympathy with Steve Johnson who writes in this week’s FTfm that “The funds recommended by consultants do no better than any other, and by some measures they underperform the wider market significantly”. He is referring to recent research, conducted on US equity funds, published by Oxford university’s Said Business School. I think he takes it too far in labelling all manager research, done by all consultants, across all asset classes as “worthless”. I don’t agree. I have worked with (and been interrogated by) some great manager researchers, as well as some awful ones, and there are asset classes, strategies and market environments in which good research is invaluable.

It is true that many manager researchers go through the same tick-box exercise of screening out poor past performance, small assets-under-management, new teams, high turnover, etc. It’s easy to ignore funds that don’t neatly fit into a box, in favour of factors that are more easily observed such as business profitability, coherent philosophy, consistent process, risk control, client service and past performance. I can understand why many firms do it this way (it’s easier, more scalable and lower risk), but rigid templates, tick-boxes, rigorous screens and committee decision making kills the best investment ideas for manager researchers (just as it does for fund managers).

Unfortunately, even when consultants conduct face-to-face meetings with fund managers they are not always effective. Fund managers are hugely incentivised to say the right thing and to avoid saying anything that might cause concern. The rewards for getting it right are massive and the cost of getting it wrong is bigger. Fund managers get coached, briefed and trained ahead of due diligence research visits. Only the best communicators are usually presented to researchers. This understanding is so ingrained that roles and promotions often depend critically on communication skills in consultant and client meetings. These many layers of polish take some getting through.

Getting under the bonnet

Over the years my colleagues and I have experimented with a variety of methods to get beneath the surface of managers in face-to-face meetings/interviews:

·  recognising that our main advantage was the power of comparison, we would compare stories for accuracy across different individuals in a team or have face-to-face meetings with all the managers of a particular strategy/sector in a short period of time;
·  leveraging the privilege of being able to interview people at all levels of a company from CEO’s, to fund managers and analysts, to risk managers, operations and support;
·  monitoring what was said in meetings with subsequent on-the-desk research of portfolio positions, key risks, changes to decisions over time and in different market conditions;
·  retaining an element of surprise, visiting managers at short notice (like the Ofsted inspectors that turn up to schools unannounced) and asking to see people who hadn’t been prepared;
·  getting trained in the art of enquiry, asking probing questions around uncomfortable issues, using silences, ensuring that we aren’t just being presented to and focusing the discussion what matters most;
·  forming our own view of third party research, tools and systems, including speaking to the banks/sell-side for their experience of fund managers dealing practices.

One of the most effective techniques I used was to share my research notes with fund managers, appealing to the ‘better angels of their nature’, moving to a much more open and honest basis of engagement.

The common traits of the best fund managers

As I mentioned earlier, I have had the privilege of hiring and managing some amazing investment talent over the years and they tended to have the following traits in common:

·  an ability to make decisions in the absence of complete information (otherwise it can be too late);
·  a natural appetite for taking risk and being at risk (of loss);
·  a clear sense of personal accountability, rather than deferring real decision making to committees;
·  seriously competitive, they compete with some of the smartest people in the world and their performance is visible to all daily;
·  tremendous pride for their craft, they are fascinated by how markets work and evolve;
·  surprisingly imaginative, creative and lateral thinking; they think about “what may happen?”, “what could go wrong?” – which is often the best form of risk management
·  make decisions intuitively, based on years of experience and practice, making it difficult/artificial to articulate how they make decisions, in terms of a clear process. Yet it is a clearly articulated process that so many manager selectors look for.

An aside – The problem with graduate recruitment

Some of the best fund managers I have worked with had not had a conventional financial education. They are not all Maths and Economics graduates. They were not all A-grade/1st class students. They were not all head boys/girls and had not all trained for the Duke of Edinburgh award. In fact for a number of them, their risk taking traits were formed in their early years.

The crazy thing is despite knowing this, most fund management companies only recruit Maths/Economics graduates, who have their sights set on becoming fund managers every year, from the best universities, with the best grades, even though this rarely provides the best material to train a good fund manager.

It’s a real bug-bear of mine as I think investment teams also need to hire fund managers from off-the-beaten-track and seek out those with not only the mental resilience and market savvy but also imagination, risk-taking sensibility and a strong sense of personal responsibility.

Final thoughts

I am a big believer in active management (alongside passive and smart beta management), in particular that some people and teams, in some asset classes and market environments, have the ability to consistently outperform their peers. I have also worked with some great manager researchers and conducted research on asset classes and strategies where good research adds meaningful value for clients. At the end of the day good manager research is not all that different from good fund management.

Going forward, I feel the best consultants will focus their resource and attention on identifying and quickly assessing managers, strategies, or asset classes that have compelling sources of return (to help their clients get in early before the crowd) and even more importantly help their clients get out early enough to not be left with the masses trying to squeeze through a tiny door. Manager research will need to become part and parcel of a good investment process, aligning bottom up with top down, with sole the objective of making money for clients, rather than just picking safe funds and managers.

In my opinion, the best fund managers and manager researchers tend to have one or more of the following sources of competitive advantage:

1.  Information edge – access to better, broader, more reliable or more timely information
2.  Processing edge – ability to sift through data to quickly identify the key issues (qualitatively, quantitative or both)
3.  Decision making edge – ability to make good decisions more often than not (alone or as part of a team) and often in the absence of complete information
4.  Execution edge – ability to access deal flow and the best market pricing, in size and in times of crisis
5.  Resilience / Humility – ability to stick with a good decision in the face of pressure from the business, market or peer group balanced with the humility to know when you’re wrong.

I would love to hear your thoughts (Reply below or to [email protected]sheth.com).

Outcomes revolution in investment management & pharmaceuticals

IMG_0744In this month’s issue of IPE Mitesh Sheth outlines what investment managers can learn from the transformation taking place in the pharmaceutical industry.

03 June 2013

I was recently invited by Sanofi, the fourth largest healthcare company in the world by prescription sales, to talk to 500 of their UK and Irish employees about my experiences with innovation in the investment management industry. As I prepared for the presentation, talked to Sanofi’s leadership team and participated in their workshops, I came to realise the massive parallels between the pharmaceutical and fund management industries. Both industries are in the middle of an outcomes revolution.

Investment outcomes in investment management

I was first drawn to investment management, having been a pension fund consultant and manager researcher at Towers Watson in 2005. I joined David Jacob, head of fixed income at Henderson, determined to design better investment products and solutions for institutional clients. I felt strongly that clients shouldn’t care about index benchmarks, narrow asset class definitions, regional boundaries and deceptive strategy labels (like hedge funds) in achieving their overall investment outcomes – be that income, capital preservation, beating inflation, long-term growth, and so on.

We built a risk budgeting and capital-allocating ‘investment strategy group’ at the centre of the investment process. This allowed us to engage with our clients (and their ultimate clients) around their goals, risk appetite and time horizon in designing and delivering investment outcomes. With a focus on outcomes, we brought together high yield and investment grade analysis, developed market and emerging market analysis, as well as cash bonds and derivatives expertise to give clients access to the fixed income universe against their choice of benchmarks and targets.

I still believe clients should begin with the end in mind. Our starting point should be: where am I today; where do I want to get to and by when; how much risk am I willing to take (what return volatility would be uncomfortable and what’s my maximum drawdown); and what cash flow (or liquidity) do I need along the way. This is true for a pension fund, an individual investor, a family office, a sovereign wealth fund – in short, anyone.

Background to the pharmaceutical industry

The pharmaceutical industry has changed a lot over the past few decades but at its core it still develops, produces, markets and distributes drugs licensed as medicines. Drug discovery and development is very expensive as only a fraction of all compounds investigated are ever approved for human use. To cover these costs a company needs to discover a new blockbuster drug (one which generates revenues in the billions) every few years.

The industry has been growing at a rapid rate since the 1970s, as legislation allowing for stronger patents has come into force in most countries, helping pharmaceutical companies to generate significant profits from their patented products. In recent decades, a handful of large companies have dominated manufacturing of medicine around the world, supported by numerous mergers and acquisitions.

Pharmaceutical companies have been great cash generators for shareholders over the past 20 years, and IMS Health values the global pharmaceutical industry at over $800bn (€620bn). But while healthcare ought to be simple at its core, layers of management regulation, processes, policies, business models and acquisitions have complicated pharmaceutical organisations and the healthcare industry over the years – creating a global problem today that itself appears to defy definition.

Drivers of change

The market capitalisation of the largest pharma companies is expected to come under significant pressure in the coming decade. Over the next few years patent protection on historical blockbuster drugs will continue to run off. Regulators are demanding more affordable and cost-effective therapies. In addition, there is an industry-wide research-and-development pipeline gap meaning there are no big blockbusters on the horizon.

Furthermore, there is a growing demand for personalised healthcare challenging the current business model, with new competitors with new business models emerging and gaining in strength.

To add to its woes, the industry’s image has been damaged by accusations of disease mongering, bribing doctors, false claims and illegal marketing, not to mention the high profile court cases. Bestselling books such as Bad Pharma (2012), Side Effects (2008) and Big Pharma (2006) have built on the public’s impression of big businesses putting profits over patient welfare. Even Hollywood portrays pharma as a global, shadowy force (not unlike the way in which the investment industry is portrayed).

The industry has survived a continuous series of regulatory, scientific, social and political challenges in the past. However, the changes it faces today from regulation, competition, commoditisation, technological advances, austerity and public perception are significant on their own and even more disruptive when considered together, demanding a more radical response.

Parallels with fund management

These forces of change are very similar to those facing the fund management industry (global assets under management are estimated by IPE to be around €39.2trn):

• Historical blockbuster products are being commoditised;

• Intense competition is putting pressure on margins;

• Disillusioned clients and customers are frustrated with fund manager self-interest;

• Regulators are ever more intrusive, demanding more transparent charging, better management of conflicts and clearer marketing;

• Technological development is spawning new products, new business models and new avenues for client communication;

• Economic austerity, low growth and on-going cost cutting mean clients and end-customers want more for less.

Pharmaceuticals, like fund management, are B2B businesses in that the customers are essentially not the end-patients but the intermediaries – the healthcare professionals, doctors, consultants and pharmacists. These intermediaries are facing change and disruption of their own with intense regulation, flat budgets, pressure to cut costs and growing patient demands, much like the pressures on IFAs, platforms, banks, insurance companies, pensions consultants and funds.

With this roller coaster of changes and resultant uncertainty about the future, the only constant that pharmaceutical and fund management companies can hold onto is putting the end-customer (patient) at the centre. Both industries need to transform from being product centric to customer (service) centric; from pushing drugs and funds to helping customers improve their health and wealth.

Pharmaceuticals and fund management are in the midst of an ‘outcomes’ revolution. This is a huge undertaking and it cannot be achieved through a series of incremental steps or a long list of initiatives. Such fundamental changes call for a focused and radical response, leveraging one’s strengths.

Pharma’s response

Historically, large pharmaceutical companies have reacted to market pressures by cutting costs, and on the face of it this time is no different. If you look deeper though, there is a realisation among senior leaders that cost cutting is short term and incremental, and it will not address the fundamental shift they are experiencing in the competitive landscape.

They know that their entire business model needs to be looked at differently.

Sanofi (and the other major pharmaceutical companies) have recognised the need to shift from being a product marketing company to becoming a customer relationship business.

They believe that while having great products was enough to drive success in the past, this nowadays creates diminishing returns. They know that their future success will be determined not just by how many drugs are sold, but how well their products, services, tools and education have helped to improve or maintain a patients’ health and wellbeing.

Their revenues will still come from product sales, but the reason why customers will want to buy from pharmaceutical companies is changing. They need to offer their customers more for less and create an ecosystem of products and services around the end-patients’ health outcomes.

For example, in 2012 Sanofi and Agamatrix launched a new type of blood glucose monitor, which also connects to a smart phone. This allows patients to track glucose levels continuously and give them access to a telephone hotline and other support services, which earns Sanofi considerable customer loyalty. This shift to integrate products with innovative monitoring technology and personalised support services was possible because Sanofi listened to the needs of patients with diabetes.

With any change in strategy it is critical to diagnose your problems honestly and to leverage your strengths to differentiate your business. Pharma companies continue to build a stronger product portfolio through deals, partnerships, alliances and virtual R&D to access a broader universe of research companies.

However, they know not to stop here. Their sales people know their customer and they have unparalleled access and information. The best pharma companies are determined to build on this to be the partner of choice for their customers and to go beyond that in building a relationship with the end-patient too.

Pharma companies are breaking down silos (diabetes, oncology, generics, and so on) to use key account management techniques to ensure their customers do not get lots of different sales reps trying to get a share of their limited time. Instead, they are working on a single point of contact which understands the customer’s needs and offers support, education, services and products to help meet patient health outcomes. They are learning to think and care more about the customer and the patient (their needs, their experience and their long-term relationship) rather than just focusing on the disease, the drugs and their profits.

There is a significant effort being made to transform how medicines are presented, marketed and sold with a better understanding of stakeholder needs, demonstrating clear value for healthcare professionals and end patients. Sales reps are increasingly becoming a conduit of best practice among healthcare professionals, making links and introductions between stakeholders. The best are helping their customers – the intermediaries – deal with their challenges, as well as the steps, processes and tools to get to where they need to.

I am most impressed with the acknowledgement that this requires a major shift in attitude, behaviour, people and culture. Significant training of senior leaders, middle managers and other employees is underway. Employee-led customer-centric innovation is a powerful way of achieving this kind of culture change. In the past pharmaceutical innovation was limited to product development much like in fund management. Pharmaceutical companies are starting to use innovation more broadly across their employee base to improve business efficiency and customer service too. This requires giving employees permission to take risks and experiment with new ways of working without the fear of failure.

Taking a blank sheet of paper to fund management

The vast majority of investment management companies are not structured around their clients’ needs and outcomes. They are built around fund, asset class and regional silos that operate independently with limited dialogue, interaction and collaboration. A handful of houses have created successful outcome teams or divisions – with LDI or multi-asset specialists – though even there the challenge remains to apply this way of thinking to the rest of the business.

Senior leadership in investment management houses does not yet accept that the investment management business model needs to be overhauled. There is no overall drive to move the business from being product marketing to client relationship centric, and no corresponding plan to shift attitude, behaviour, people and cultures. Innovation remains a product manufacturing activity.

As an industry we need to look at the end investors and clients, rather than just being focused on the intermediaries and consultants, and start to ask ourselves how we can work together do a better job for them.

Some of the more dynamic, agile and client-centric investment managers are starting to realise this and are taking it seriously. Here are some lessons we can all learn from the disruption facing the pharmaceutical industry and their response:

  1. Our clients’ focus on outcomes will affect our whole business model not just a single multi-asset product area;
  2. A central risk-management, risk-budgeting and allocation team is essential in responding to clients’ needs and designing/delivering investment outcomes;
  3. Break down silos between funds, between equities and fixed income, between manufacturing and distribution, between back/middle office and the front office and between the corporate/board and the business to work together to deliver better outcomes for the end client;
  4. Focus on our strengths, rather than being all things to all people. Build alliances and partnerships with specialist investment boutiques and complementary players;
  5. Rebuild trust by putting the end-customer at the centre of our business. Help the clients and intermediaries deal with change and work together to deliver better solutions for the end customer;
  6. Train sales people to behave more like well-informed, trusted advisers. They must be able to listen and draw out client’s unarticulated needs. They must be able to offer advice and assistance to help our clients reach their overall strategic goals;
  7. Foster a client-centric, employee-led innovation culture beyond product manufacturing;
  8. Give our employees permission to take risk and experiment with new ways of working, without the fear of failure.

Finally, it is all too easy to stick to what we know and who we know. If the investment management industry wants to adapt, innovate, transform and engage, we need to include people with different perspectives, with different experiences and expertise; intentionally draw on customer insights, employee ideas and other industry perspectives.

I think if senior leaders in investment management commit to becoming fit for the future they will be blown away by how many middle managers, employees and clients volunteer their time, ideas and enthusiasm to solve these complex industry challenges.

If we get it right, our clients will be more successful in meeting their investment outcomes and our employees will thank us for investing in them and for helping them to do the best work of their lives.

Here’s a link to the full article here. 

Investment actuaries in the future

IMG_0781Tomorrow evening (Thursday 6th June 2013) I have been invited to facilitate a ‘blue sky’ thinking session at Staple Inn with some of the brightest thinkers in the city of London to come up with the subjects and themes that should drive the Finance & Investment research agenda for the Institute and Faculty of Actuaries (IFoA) over the next decade.

Whilst a career as an actuary* was recently ranked as the best job of 2013** I think identifying the right research directions is really important to ensure that the actuarial profession remains relevant, forward looking and at the cutting edge of the finance and investment thinking in the future.

I have 3 questions for you (both actuaries and non-actuaries are welcome to respond):

  1. What is the most important thing people gain from the actuarial qualification?
  2. What are the biggest challenges and opportunities facing actuaries in finance and investment firms?
  3. What do you think should drive the Finance & Investment research agenda for IFoA over the coming decade?

Please reply to this post or email me on [email protected] with your answers, as well as any other ideas or suggestions by 3pm GMT tomorrow (6th June).

Many thanks in advance,

Mitesh

 

* Actuaries put a financial value on risk – for instance, the chances of a hurricane destroying a beachfront home or the long-term liabilities of a pension.

** The best job of 2013 – CareerCast.com, a career website owned by Adicio Inc., recently ranked 200 jobs from best to worst based on five criteria: physical demands, work environment, income, stress, and hiring outlook. Based on these criteria, a career as an Actuary came out on top. You can find the full ranking here