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20th March 2019
Lansons, 24A St John St, Clerkenwell, London EC1M 4AY
Welcome to
David Masters,Director,Lansons
on
"Active/Passive - seeing the whole picture; and what does the future of
asset management look like?"
Welcome to
Andy Agathangelou, Founding Chair,Transparency Task Force
on
"Active/Passive - seeing the whole picture; and what does the future of
asset management look like?"
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Today’s programme:
10:30 Registration, refreshments and networking.
11:00 Welcome to the symposium by David Masters, Director at Lansons
11:10Andy Agathangelou to introduce the Transparency Task Force and set the scene for the event, explaining the importance of the topic to many big decisions being made by the retail and the institutional market, particularly pension schemes
11:30Presentation with Q&A, byHelen Thomas, aka Blonde Money.
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Today’s programme continued:
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12:00 Presentation with Q&A, by Dan Brocklebank,UK Director, Orbis Investments
12:15Presentation with Q&A, by Clive Waller,Managing Director, CWC Research; and Chairman, The Investment Network
12:30Presentation of the Transparency Trophy; a trophy is awarded to a champion of transparency and finance reform at each of our symposia
12:40Lunch and networking; followed by “team photo”
Today’s programme continued:
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13:40“If I had just 10 minutes to comment on the Active/Passive debate, this is what I’d say…”
Each talk will be followed by a facilitated Q&A session.
The line-up for this part of the programme features the following, so far:
- Adrian Tupper, Consultant, Supervisor and Counsellor, Adrian Tupper
- Mike Barrett, Consulting Director, the lang cat
- Graham Boyd, CEO & Founder, Evolutesix
- Sital Cheema, Principal, Jaanu Consulting
- Mark Falcon, Director, Zephyre
Today’s programme continued:
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15:30Refreshments and further networking
16:00
The Great Big Open Debate; where everybody will have the opportunity to share
their thoughts on the key issues raised by the symposium and ponder on what the key conclusions are. Is there going to be any consensus?
Also, we will be tackling the "elephant in the room" question,
"What is the future of asset management?"
17:00Further networking; with drinks and nibbles
18:00Final close
Let’s please show our appreciation to today’s host:
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But before we go any further…
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About
• We are the collaborative, campaigning community, dedicated to driving up the levels of transparency in financial services, right around the world
• We believe that higher levels of transparency are a pre-requisite for fairer, safer, more stable and more efficient markets that will deliver better value for money and better outcomes
• Furthermore, because of the correlation between transparency, truthfulness and trustworthiness, we expect our work will help to repair the reputational damage the sector has been suffering for decades
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About mission
• We are an informal but increasingly influential forum of ethically-minded people that care about the financial services sector and the people it serves
• We are collaborative, collegiate and consensus-building; focusing on solutions not blame
• We believe the financial ecosystem is profoundly important to the wellbeing of society, the global economy and political stability; but there’s a great deal wrong with it that needs reforming
➢ Our mission: “To drive positive, progressive and purposeful Financial Services reform by harnessing the transformational power of transparency"
• The Engagement Deficit
• The Understanding Deficit
• Hidden costs
• Hidden risks
• Opportunistic opacity
• Opportunistic obfuscation
• Short-termism
• Insufficient client-centricity
• Scams and scandals
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What is• Regulatory Capture (USA?)
• A ‘profit before principle’ mindset
• Reputational damage
• Conflicts of interest
• Financial instability
• Malpractice, Malfeasance, Misconduct
• A general lack of market integrity
• Harmful incentive structures
• Miss-selling
➢ The Trust Deficit; and so on
helping to reform?
➢ How? - by shining a light onto the issues
➢ “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman” (Louis D. Brandeis, Other People’s Money and How the Bankers Use It, 1914)
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Why isso concerned about the Trust Deficit?
Key Insights from the 2108 Edelman Trust Barometer:
• An annual global study in its 18th year; 28 countries; 33,000 respondents
• Bad news: The Financial Services sector scores a very poor 15th out of 15 (i.e. last) in terms of general levels of trust
• This is a systemic problem for a sector that needs to be trusted to function successfully
• “If you take trust out of financial services, what do you have left?”
• The problem manifests in many ways; for example the UK’s Savings Ratio is the lowest since records began, way back in 1963 – is that partly because people are predisposed to distrust the sector?
➢ What does the worst case scenario look like if low levels of trust in financial services persists?
➢Something needs to change!
http://cms.edelman.com/sites/default/files/2018-03/Edelman_Trust_Barometer_Financial_Services_2018.pdf
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strategy for driving change:
Our Strategy for Driving Change is all about bringing togethor two groups of people:
#1, those with a sense of passion & purpose about what needs to be changed; such as the members of our SIGs
#2, those with the power & position to make change happen; such as the financial regulators
We do this in many ways, for example through our Transparency Symposia; and through our Special Events
Here are three good examples of our Special Events:
‘The First Transparency Strategy Summit in the World’
‘The primary purpose of the first Transparency Strategy Summit in the world is to begin to build consensus on the best way to protect the interests of the UK’s pensions-saving public through full disclosure on all the costs and charges they are paying but not being told about’.
• 12th September 2016 at the Houses of Parliament
……which may have led to the opening of the Work & Pensions Select Committee’s Enquiry on Pensions Costs Transparency
5th Sept 2018 at the Commons:
x 110 (99 in the UK+ 11 overseas)13th Jan 2017
‘Launch of the TTF Banking Team’s White Paper on Current Accounts’
• 26th June 2017 at the Houses of Parliament
‘Sensible recommendations about the lack of transparency around charges for Free-If-In-Credit personal current accounts’
“Ideas to help reduce the chance of another Global Financial Crisis”
• 7th February 2018 at the Houses of Parliament
‘A special meeting at which we presented our White Paper on the topic and initiated the launch of a new All Party Parliamentary Group on Financial Stability’; the inaugural meeting is on 23rd May
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Helen Thomas, Founder, Blonde Money
Until 11:55 including Q&A
➢ Asset Management• Pensions Team• Communications• Financial Planning• PISCES • Fintech• APACAmericas• EMEA• GTI• Banking• Market Integrity• Costs & Charges• Financial Stability➢ Investment Consulting & Fiduciary Management• Governance, Compliance, Risk, Legal & Regulatory
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➢ For more information including a list of all our volunteers see: https://www.transparencytaskforce.org/teams-of-volunteers/
AboutSpecial Interest Groups
✓ 550+ valiant volunteers✓ Organised & mobilised into 21 Special Interest Groups✓ Small groups of people working together✓ Subject-matter experts ‘that want to stand up, not stand by’✓ Building consensus on how to solve known problems✓ Not just ‘a talking shop’✓ One or more campaign objectives per team
• Foreign Exchange• Anti-Scams➢ Hedge Funds➢ Private Equity➢ Whistleblowing
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Dan Brocklebank,UK Director, Orbis Investments
Until 12:15 including Q&A
The Transparency Task Force
20th March 2019
The Transparency Symposium"Active/Passive - seeing the whole picture; and what does the future
of asset management look like?“
Dan Brocklebank, CFA
This communication is directed at professional clients (as defined in the Financial Conduct Authority Handbook).
Persons who are not professional clients should not rely on this communication.
Delhi
Source: Wikimedia Commons. 23
24
Source: Shutterstock.
“Never, ever, think about something else when you
should be thinking about the power of incentives.”
Charles T. Munger
25
Revenues = AUM x Fee %1. Don’t lose existing clients
2. Multiple fund launches
3. Increase sales force
Assets under management (AUM). 26
Source: Gerhard Traschütz, National Guard photo by Master Sgt. Kurt Skoglund/Released 27
28
Source: Shutterstock.
“It always seems impossible until it is done.”
Nelson Mandela
29
10%
20%
30%
40%
50%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Asia Europe United States
31 Dec 2018 | Source: Morningstar Direct Asset Flows.
The latest mega-trend in investing: increasing flows into passive funds
30
31
There is no silver bullet
Source: Shutterstock.
Source: Financial Times. 32
Source: GPIF. 33
“GPIF fully appreciates that the new structure
will have a big impact on the asset
management sector as a whole”
Source: GPIF. 34
Performance Fees: a 5-step checklist
Start with the fund’s objective
Pay close attention to the fund’s benchmark
Look out for low hurdle rates
Compare the base fee to a passive alternative
Be wary of high watermarks where the manager
isn’t penalised
Source: Orbis.
35
Notices – Orbis Investments (U.K.) Limited
Legal Notices
Approved for use in the United Kingdom by Orbis Investments (U.K.) Limited, 28 Dorset Square, London,
England NW1 6QG which is authorised and regulated by the Financial Conduct Authority (“FCA”).
References in this presentation to ‘Orbis Investments’ or the ‘Orbis Group’ are to trading group Orbis
Investment Management Limited is part of, or to one or more entities in that group as applicable. This
presentation contains information relating to one or more funds managed by Orbis Investments (together
‘Orbis Funds’). Orbis OEIC is authorised and regulated by the Financial Conduct Authority. All other Orbis
Funds are classified as unregulated collective investment schemes for the purposes of UK legislation and
are not available to retail investors in the UK. This presentation has been prepared for financial
intermediaries who may seek to make Orbis Funds available to their customers. As such, it is directed only
at investment professionals (as defined in the FCA Rules) and must not be relied upon by any other
person. The distribution activities to which this presentation relates will not be conducted with individuals or
entities that are not investment professionals. Subscriptions are only valid if made on the basis of the
current prospectus or offering memorandum of an Orbis Fund. Past performance is not a reliable indicator
of future results. Results may decrease or increase as a result of currency fluctuations. Orbis Fund share
prices fluctuate and are not guaranteed. When making an investment in the Funds, an investor’s capital is
at risk and they may not get back the amount they originally invested. While we have endeavoured to
ensure the accuracy of the information herein, such information is not guaranteed as to accuracy or
completeness. At any time, members of the Orbis Group may have long or short positions in, and may be
buying or selling, the investments, if any, referred to in this presentation. This document has been prepared
solely for the information of the party to whom it has been delivered and may not be reproduced or used for
any other purpose. All rights reserved.
All information and investment team commentary, including portfolio security positions, is as at the date
stated at the bottom of each page. The views expressed are subject to change without notice.
Returns
Net returns for Orbis Funds are calculated gross of all income, net of fees and expenses, and assume
reinvestment of dividends. Here Average Fund Data is presented the latest Morningstar data available has
been used. Strategy net returns are based on the fee structure for the Orbis OEIC Standard Share Class
applied to the asset-weighted gross returns (before fees) of all Orbis Funds following the same objectives.
Strategy Returns
Strategy gross returns are asset-weighted actual gross returns of all the Orbis Funds following the same
investment objective. Strategy net returns are calculated by applying the specified fee structure to the
Strategy gross returns and do not represent actual net returns experienced by investors in the relevant
funds.
Benchmark Information
On 1 January 2018 the Orbis OEIC Global Balanced Fund changed its benchmark to a composite index
consisting of the MSCI World Index with net dividends reinvested (60%) and the JP Morgan Global
Government Bond Index hedged to Sterling(40%). Data for the period before 1 January 2018 relates to the
old benchmark, a composite index consisting of the MSCI World Index with net dividends reinvested (60%)
and the JP Morgan Global Government Bond Index (40%).
Sources
MSCI: The MSCI information may only be used for your internal use, may not be reproduced or
redisseminated in any form and may not be used as a basis for or a component of any financial
instruments or products or indices. None of the MSCI information is intended to constitute investment
advice or a recommendation to make (or refrain from making) any kind of investment decision and may not
be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any
future performance analysis, forecast or prediction.
The 60/40 Index returns are calculated by Orbis Investment Management Limited using end of day index
level values licensed from MSCI ("MSCI Data"). For the avoidance of doubt, MSCI is not the benchmark “
administrator" for, or a "contributor”, ·”submitter" or "supervised contributor" to, the blended returns, and the
MSCI Data is not considered a "contribution" or "submission" in relation to the blended returns, as those
terms may be defined in any rules, laws, regulations, legislation or international standards. MSCI Data is
provided "AS IS" without warranty or liability and no copying or distribution is permitted. MSCI does not
make any representation regarding the advisability of any investment or strategy and does not sponsor,
promote, issue, sell or otherwise recommend or endorse any investment or strategy, including any financial
products or strategies based on, tracking or otherwise utilizing any MSCI Data, models, analytics or other
materials or information. JP Morgan Global Government Bond Index (the “GBI”): Information has been
obtained from sources believed to be reliable but J.P. Morgan does not warrant its completeness or
accuracy. The GBI is used with permission. Copyright 2019, J.P. Morgan Chase & Co. All rights
reserved. The 60/40 Index may not be copied, used, or distributed without prior written approval. Neither
MSCI nor J.P. Morgan shall have any liability for any damages (whether direct or otherwise).
© 2019 Morningstar UK Limited. All Rights Reserved. The information relating to Morningstar contained
herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed;
and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers
are responsible for any damages or losses arising from any use of this information. Past Performance is no
guarantee of future results.
© 2019 FE. All Rights Reserved. The information, data, analyses, and opinions contained herein relating to
FE (1) include the proprietary information of FE, (2) may not be copied or redistributed, (3) do not constitute
investment advice offered by FE, (4) are provided solely for informational purposes and therefore are not
an offer to buy or sell a security, and (5) are not warranted to be correct, complete, or accurate. FE shall
not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this
information, data, analyses, or opinions or their use.
FE does not guarantee that a fund will perform in line with its FE Crown Fund Rating as it is a reflection of
past performance only. Likewise, the FE Crown Fund Rating should not be seen as any sort of guarantee
or assessment of the creditworthiness of a fund or of its underlying securities and should not be used as
the sole basis for making any investment decision.
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Clive Waller,Managing Director, CWC Research; and Chairman, The Investment Network
Until 12:30 including Q&A
Seeing the future through the rear view mirror
Clive Waller
Certus, Royal G Plan & Flexipension
Wrapping paper, ribbons and fancy labels
1984 – Brave New World
Nigel Lawson promised the industry he wouldn’t fiddle with LAPR
He didn’t. He abolished it!
Endowment mortgages continued for a generation with broken promises, outright lies and loads of commission
Frogs a leaping
Single premium sales became much more important
More and more, they linked to funds
Life brokers became financial or investment consultants overnight (with tuition from life co broker consultants)
The broker bond was invented!
As late as 2006, bond sales were £35 billion versus ISA sales of £6 billion through intermediated channels
Integra who?
The world of retail investment changed forever in 2001
With Transact or 7IM, the life company became irrelevant
The old product, plan or policy was dead in the water
The IFA built the product inside wrappers on the platform
Repeat after me, “Charges do not matter!”
The mantra of investment world was that charges do not matter
They were only defending the charges they owned up to – the AMC, which became the TER, which became the OCF, which one day ........
“The IMA’s figures demonstrate clearly that so-called hidden charges which cost investors billions a year are a complete myth” Richard Saunders, IMA CEO, 2
In May 2012, Saunders resigned
The FCA’s Asset Management Review has continued for years .......
A Random Walk Down Wall Street
Burton G. Malkiel’s game breaking book was first published in 1973
Jack Bogle created the world's first index mutual fund in 1975
The fight was on, hugely boosted in 2012 by RDR
AMC to TER to OCF to ..... Total disclosure?
In 2000, most advisers did not consider the subject of charges to be relevant
FNW and Cofunds advertised free platforms, denying that fund manager rebates existed. Users believed in free lunches
By 2010, cost was becoming a criterion
By 2105, advisers could typically quote OCF to two decimal points, but .....
What is ‘the market’
The mantra,” I track the market” became part of the IFP prayer book
Problem is, no one knew what ‘the market’ meant
When we asked, many said FTSE 100
The mantra stated that they didn’t make investment decisions ......
What is ‘the market’
It didn’t occur that they were making active decisions
They made them on geography, currency, industry, equity/bond, commodities, property and derivatives – to name a few
For the industry to become professional and to gain the trust of clients, it must be exact in its terminology, educated and honest
The market is a big place!
The Guardian = Over the past decade CVC has halved its stake to 35% and reaped a $4.4bn reward. That has given it a return on investment (ROI) of 351.8% and its remaining 35% stake controls the voting rights of F1’s Jersey-based parent company, Delta Topco. This gives the stake a valuation of up to $8bn – and if CVC achieves that price, it will push ROI to over 1,000%, making it the most profitable deal in the investment house’s 34-year history.
FT = US billionaire John Malone’s Liberty Media has agreed to take control of Formula One in a deal valuing the sport at $8bn.
So what is the point
There are two:
You need to understand where we were to understand where we need to go. Legacy is the biggest barrier to change
Training and qualifications are not as they should be. All advisers should have a ‘GP’ knowledge and there should be more accepted rules and industry mythology
Regulators and compliance consultants
According to Nicholas Naseem Taleb, regulators are looking to their future career in banks when doing their jobs!!
Compliance consultants depend on complex, ambiguous regulatory rules in order to earn their living
Be careful to ensure you are clear as to who is playing on your side!
Upton Sinclair
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
“He would say that, wouldn’t he” Mandy Rice Davies
Clive Jenkins, trade union leader
When the industry objected to change, he said:
“I’m not asking you if you can do it; I’m telling you, you will do it!
• The TTF shines a light on problems; to help solve them
• The TTF also shines a light on transparency champions; to encourage others
• We do this by awarding a Transparency Trophy at each of our symposia
• The winner gets to keep it
• The star-shape is significant - people can navigate using the stars so the star shape has been chosen to symbolise the idea that the winners are helping to navigate the sector to a better place
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About
• February 2016: Tomas Wijffels, Pensioen Federatie
• April 2016: Rachel Haworth, ShareAction
• June 2016: Jackie Beard, Morningstar
• September 2016: Gina & Alan Miller, the True & Fair Campaign
• October 2016: Robin Powell, Evidence-Based Investor
• November 2016: Daniel Godfrey, The People’s Trust
• December 2016: Ralph Frank, Cardano Risk Management
• February 2017: Con Keating, Brighton Rock Group
• May 2017: David Pitt-Watson, London Business School
• July 2017: Mike Barrett, The Lang Cat
• September 13th 2017: Steve Conley, Founder, Values Based Adviser
• September 28th 2017: George Kinder, Founder, The Kinder Institute
• November 15th 2017: Angela Brooks, Founder, Pension Life
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Previous winners of
• November 23rd 2017: Dr. Chris Sier, Independent Chair, FCA’s IDWG
• November 30th 2017: Dan Brocklebank, Head of UK, Orbis Investments
• March 8th 2018; Henry Tapper, Pension PlayPen, First Actuarial & AgeWage
• March 14th 2018; Bob Compton, Director, ARC Benefits Ltd
• May 24th 2018: Susan Flood, Vice Chair, Ark Campaign Group
• May 24th 2018: Nicholas Morris, Adjunct Professor, Faculty of Law, UNSW
• July 11th 2018: John Howard, Director, Consumer Insights
• July 26th 2018: JB Beckett, UK Lead, Association of Professional Fund Investors
• September 20th 2018: Heather Buchanan, Dir. of Pol. APPG/Fairer Business Bk’g
• 6th November 2018: Lesley Curwen, Reporter, BBC Freelance
• 14th November 2018: Dr. Kara Tan Bhala, President and Founder, Seven Pillars Institute for Global Finance and Ethics
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Previous winners of continued
• 17th December 2018: Julia Dreblow, Director, SRI Services & Founder, The Fund EcoMarket
• 16th January 2018: Norma Cohen, Former Financial Times Correspondent
• 12th March 2019: Darby Hobbs, CEO/Founder SOCIAL3, Co-Founder & Chairperson Conscious Capitalism Boston Chapter; and Professor Boston University
• 14th March 2019: Connie Erlanger, Co-Founder and Chief Executive Officer of Goknown; and Michael Erlanger, Co-Founder, Director and Chief Visionary, GoKnown.
➢20th March 2019 ?
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Previous winners of continued
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Lunch & networking break We restart at 13:40 with a “team photo”
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About today…1. We have run 28 Transparency Symposia; London x24, Boston x2, The Hague x1,
New York x1
2. The Transparency Times goes to many thousands of people, monthly
3. We have awarded 27 Transparency Trophies
4. We have held 3 special meetings at the House of Commons
5. We have over 500 volunteers; organised and mobilised into 18 Teams
6. We have responded to 13 formal Government/Industry Consultations
7. Have had dozens of meetings & calls with Regulators & Government Officials
8. We have produced 8 Thought Leadership White Papers
9. We have gathered over 100 Transparency Statements
10. Have had 100’s of articles/comments published; on Radio 4 three times
11. Spoken at dozens of conferences and events
12. We are growing our presence in 18 countries
13. We have the support of 78 Ambassadors
TTF Ambassadors: UK
David Pitt-WatsonExecutive Fellow
London Business School
Daniel GodfreyCo-Founder
The People’s Trust
Catherine HowarthChief Executive Officer
ShareAction
Con KeatingHead of Research
Brighton Rock Group
Ralph FrankCEO DC (UK)
Cardano
Steve ConleyFounder
Values Based Adviser
Henry Tapper, Founder, Pension PlayPen;
Director, First Actuarial Markus Krebsz,The United Nations Group
of Experts on Risk Management
in Regulatory Systems
TTF Ambassadors: UK continued
Philip MeadowcroftIndependent Shareholder
Activist
Rory MaguireCEO
FundhouseIan Peacock
Chief Client OfficerIG Group
Dr. Anna TilbaAssociate Professor in Strategy and
Governance, Durham University Business School
JB BeckettUK Lead, Association of
Professional Fund Investors
Robin PowellFounder
Evidence-Based Investor
Jackie BeardDirector of Manager Research, EMEA
Morningstar
Mark PolsonFounder and Principal
the lang cat
TTF Ambassadors: UK continued
Mike BarrettConsulting Director
the lang cat
Julia DreblowFounder SRI Services & Fund EcoMarket
Helen Scott,Chief Executive Officer,
Eris FX
Andrew Parry,Head of Sustainable Investing
Hermes Investment Management
James DaleyManaging Director
Fairer Finance
Will PriceGlobal Pensions Consultant
The World Bank
David StrippProposition Manager
David Stripp Ltd
Jon SpainTreasurer
Law for Life
TTF Ambassadors: UK continued
Sunil ChaddaAdvisory Board Member
Association of Professional Fund Investors
Ruston Smith,Chairman,
Tesco Pension Fund Trustee Board, Tesco DC Governance
Committee, Tesco Pension Investment Limited
Mark Falcon,Founder and Director,
Zephyre
Bob ComptonManaging Director
ARC Benefits LimitedWendy Addison
CEO SpeakOut SpeakUp
Andrew MillsFounder and Director,
Insight Financial Research
Joe St Clair UK Director
World Sustainability Development Forum
Professor Michael MainelliExecutive Chairman
Z/Yen Group
TTF Ambassadors: UK continued
Johan CrasManaging Director
Kempen Capital Management
Terry WebsterProfessional Trustee
Lindis Consulting
Sital CheemaSustainability Investment
ConsultantJaanu Consulting
Peter UhlenbruchAODP Investor Engagement
OfficerShareAction
TTF Ambassadors: Italy
Francesco Briganti,Secretary General,
Cross Border Benefits Alliance - Europe
TTF Ambassadors: Belgium
Benoît Lallemand,Secretary General,
Finance Watch
TTF Ambassadors: Netherlands
Tomas Wijffels,Senior Policy Advisor,
Pensioen Federatie
Eric Veldpaus,Founder, Institutional
Benchmarking Institute
Peter Kolthof, Partner and Head of the Netherlands,
Avida International
Pascal Hogenboom,Associate Director,
Strategia Worldwide
Marlon SahetapyHead of Delegated
SolutionsAon
TTF Ambassadors: USA
Paul Secunda, Professor of Law and Director,
Labor and Employment Law Program
Marquette University
Bernie Nelson,President,
Style Research,North America
Dr. Kara Tan Bhala,President and Founder,
Seven Pillars Institute for Global Finance and Ethics
Matthew Murray,Co-founder,
The Center for Business Ethics andCorporate Governance
George Kinder,Founder,
The Kinder Instituteof Life Planning
Stephen DavisAssociate Director and Senior Fellow,
Programs on Corporate Governance and Institutional Investors,
Harvard Law SchoolJon Lukomnik,Executive Director,
Investor Responsibility Research Institute
Richard Field,Founder, The Institute for
Financial Transparency
TTF Ambassadors: USA continued
Darby HobbsFounderSocial 3
Chris TobeFounder
Stable Value Investments
Lorelei GrayeFounder
Leodoran Financial
Adam ChoppinInvestment Director
FIS Group
Greg RogersCo-founder
Eratosthenes
Charlie AtkinsCo-founder
Envonet
John Spoto,President and Founder,
Sentry Financial Planning
Helene Spoto,Co-Owner,
Sentry Financial Planning
TTF Ambassadors: USA continued
David Rowe,President,
David M. Rowe Risk Advisory
Michael Erlanger,Founder and Managing Principal,
Marketcore.com
Joseph Hosler CFAManaging PrincipalAuour Investments
Erik ConleyCEO
Conley Investment Group, Inc.
Aivars LodeChairmanIT Capital
Aaron Bernstein,Editor
Global Proxywatch &Senior Research Fellow,
Harvard Law School Pensions Project
Thom YoungPresident
FARCapital
Rohanna WiseFounder & CEO
Wise Trading Technologies
TTF Ambassadors: USA continued
Sander EijkenduijnCOO
SCORPEO US LLC
TTF Ambassadors: Canada
Larry ElfordFounder,
Investor Advocates
Larry BatesFounder,
The Wealth Game
Paul Bates,Senior Counsel,
Paul Bates Barrister
John DegoeyPortfolio ManagerWellington Altus
TTF Ambassadors: Australia
Ian Fryer, Head of Research,
Chant West, Sydney David Knox,
Senior Partner, Mercer Melbourne
Dr. Nicholas Morris,Adjunct Professor,
University of New South Wales,Sydney
TTF Ambassadors: Ireland
Paddy Delaney,Founder,
Informed Decisions Blog and Podcast
John NolanChief Commercial Officer
Visible Thread
TTF Ambassadors: Poland
Krzysztof Grabowski Ph.DSecurities Broker
TTF Ambassadors: Germany
Paolo SironiIndustry Academy and Author,
Watson Financial ServicesIBM
• Our Ambassadors are good people who want finance reform• They have a “stand up, not stand by” mindset• Many of our Ambassadors are subject-matter experts• Building our global network of good people who are subject-matter
experts has helped me to envision a major international project dedicated to answering a question of great importance…
“How can we accelerate the rebuilding of trust and confidence in financial services?”
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Boston 12th March 2016
New York 14th March 2016
• A major 5-year international project• To drive positive, progressive and
purposeful finance reform• Development of 21 or more “Finance
Reform Goals”
• Bringing together all the key stakeholders - policymakers, politicians, regulators, thought-leaders, subject-matter experts, progressive market participants, trade bodies and professional associations etc.
Initial work on The Finance Reform Goals
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• Each goal to have a chapter in a book; written by a collaborative dream-team of subject-matter experts – more volunteers wanted
• The book to guide achievement of the goals; updated annually• Thought Leadership: Academic, Research, and Evidence Base• Culture: Ethics, Values, Professionalism, “Principle Before Profit”, Values-Based Leadership, MQ,
Cultural Transfusion and Leadership Development• Market Integrity: Codes of Conduct, Professional Oaths, Trade Bodies, Professional Associations and
Standard Boards• Governance: Compliance, Regulatory, Legal, Audit, Custodianship, Risk Management, Stewardship,
Litigation• Technology: Fintech, Online Data Integrity & Privacy, Cyber Security, Data Analytics and Reporting,
Reform of the Credit Rating Agencies • Product Design: Asymmetries of Information, Product Accreditation and Transparency Accreditation• Communications: Consumer Engagement, PR, Reputation Management • Metrics: Measurement, Monitoring and Management of the trust and confidence deficit• Human Capital Strategy: Incentive Design, Responsible Reward, Inclusion and Diversity• Purposefulness: Impact Investing, Sustainability, Climate Change, ESG, Socially Responsible Investing
and Social Finance• Consumer Protection: Whistleblowing, Scam Prevention and Support• Alignment of Interests: Progressive fee structures, symmetries of information• The Economic System: Financial Stability, Shareholder Primacy/ Stakeholder Primacy, Diversity of
Ownership Structures➢ Anything missing?
The next Transparency Symposium:
Mobile: +44 (0)7501 460308
“ How can we accelerate the rebuilding of trust and confidence in financial services?”
➢ Wednesday 1st May, AmsterdamAON, Quarter Avenue Building, Condensatorweg 54, 1014AX, Amsterdam, Nederland
➢ Thursday 16th May , LondonVenue wanted (we have a Plan B but it may not be large enough)
➢ Wednesday 29th May , LondonVenue wanted
Venues wanted for Transparency Symposia in:The Americas
Boston
New York
Washington D.C.
Chicago
San Francisco
Los Angeles
Santa Monica
Toronto
Ontario
Montreal
Vancouver
EMEA
London
Paris
Brussels
Frankfurt
The Hague
Amsterdam
Berlin
Dublin
Zurich
Geneva
Dubai
Cape Town
Johannesburg
APAC
Sydney
Melbourne
Auckland
Tokyo
Singapore
Hong Kong
Beijing
Shanghai
➢ Do you or any of your contacts have a venue we can use that seats 20+?
Mobile: +44 (0)7501 460308 [email protected]
“Short & snappy speaking slots”
“If I had just 10 minutes to comment on the Active/Passive debate, this is what I’d say…”
- Adrian Tupper, Consultant, Supervisor and Counsellor, Adrian Tupper
- Sital Cheema, Principal, Jaanu Consulting
- Mike Barrett, Consulting Director, the lang cat
- Graham Boyd, CEO & Founder, Evolutesix
- Mark Falcon, Director, Zephyre
Until 15:30 including Q&A
EMERGING TREND: ACTIVE VS. PASSIVE
NON-FINANCIAL INVESTORS
Graham Boyd
NON-FINANCIAL: PASSIVE IS BECOMING ACTIVE
Angry people, angry planet
Few ethical investments
TREND: REINVENTING ORGANISATIONS
REINVENT: DEVELOPMENT, TASKS AND INCORPORATION
EVOLUTESIXADAPTIVE
WAY
FAIRSHARESLIMITED
SELF-ORGANISING
John LewisB-Corps
Purpose.ag
REGENERATIVEBUSINESSES
ENABLES
FROM ARISTOCRACY TO DEMOCRACY
IN NATIONS ….. AND NOW IN COMPANIES
FAIRSHARES: Evolutesix example
VOTING WEIGHT
DIVIDENDS
STEWARD
STAFF
USER
INVESTOR
26%
26%
24%
24%
0%
40%
24%
36%
Works
today in
almost all
countries
SUCCESS STORIES: elements
18% CAGR to investors since 1987
1% went under during 2009, vs. 25% of competitors
Largest hedge fund: $50bn. Total of
$154 billion in assets
COLIN MAYER (Saïd Business School)
We have moved away from the capital intensive world to a
world of human and intellectual capital. And that means that
the corporation today is really dependant on something that is
very different from that of the shareholder interests of the
past. This focus on the notion of the shareholder oriented
corporation is actually undermining the commercial success of
corporations.
NON-FINANCIAL INVESTING IN 10 YEARS:
From AGM passive to AGM active
NO NEW LAW: ALL STAKEHOLDERS CAN ALREADY HAVE FULLY
ACTIVE VOTING ENGAGEMENT TODAY
The Transparency Symposium: Active/Passive –
seeing the whole picture
19 March 2019
Mark Falcon
Economics says that alpha ≈ zero…
93
Market risk
premium
Risk-free
rate
“A lot of very smart people set out to do better than average in securities markets. Call them active investors. Their opposites, passive investors, will by definition do about average. Therefore, the balance—the active investors—must do about average as well. However, these investors will incur far greater costs. So, on balance, their aggregate results after these costs will be worse.
To a great extent, active managers’ efforts are self-neutralizing. There are, of course, some skilled individuals who are highly likely to out-perform over long stretches. The problem simply is that the great majority of managers who attempt to over-perform will fail. Further complicating the search for the rare high-fee manager who is worth his or her pay is the fact that some investment professionals, just as some amateurs, will be lucky over short periods.
The bottom line: When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Investors should stick with low-cost index funds.”
…The ultimate active manager also says the same.
94 Warren Buffett, Berkshire Hathaway Annual Report, 2016
Zephyre Ltd
Company Number 9882211
VAT Number 227867177
www.zephyr.co.uk
+44 (0)20 3633 0130
10 Bloomsbury Way, London WC1A 2SL
Thank you
Mobile: +44 (0)7501 460308 [email protected]
The Great Big Open Debate
The Active/Passive Debate; andWhat’s the Future of Asset Management?
60 minutes
Our work is done, for today!
Thank you for your attendance, input and ongoing support!
Optional networking, drinks and nibbles until 18:00 courtesy of
Mobile: +44 (0)7501 460308
Andy AgathangelouFounding ChairTransparency Task Force
[email protected]: +44 (0)7501 460308
Many thanks again to today’s hosts and everybody else for taking part so fully!
