‘Work with us’: Wealth giant’s pitch to Australian regulators

view original post

He argues the UK experience is one that should inform the discussion about how to reform the Australian industry. A federal government review of the advice sector is underway, and the new Labor government has promised to address the regulatory burden on the sector, which has increased sharply since the banking royal commission.

“The UK went through a very similar journey, the painful restructure that we’re seeing right now,” Jollie says. “I would certainly urge the regulators to … find ways to work more constructively with the industry because we have solutions. There are innovative solutions out there, but we haven’t seen them take off.”

Sitting on the sidelines

Given the turmoil sweeping through global markets, this is obviously a time when high-quality advice becomes important; Buehlmann says most investors around the globe are sitting on the sidelines, with fund flows across the asset management sector weak. “The world seems unstable right now,” he says.

The question for investors willing to dip their toe in the water is: where to do it? Buehlmann argues that Asia and emerging markets, where Abrdn has historically been strong, could provide something of a safe haven right now, given the monetary policy pressure seen in Australia and the United States is not as prevalent.

Indeed, China is loosening monetary policy to simulate its COVID-hit economy and Buehlmann argues Australians are underweight this market; he says investors here focus on local stocks and “global” stocks, but the latter generally means the US market only.

Advertisement

Buehlmann has a few other key messages for investors. Their top priority, he says, should be diversification across asset classes and geographies to help manage what is likely to be an extended period of volatility. This includes bonds, which look interesting again for the first time in a long time.

Second, active management will matter in a period like this. Finding the right stocks – his preference is for quality companies with good balance sheets and pricing power – will be important in a world where there are plenty of bargains but alpha may be hard to find.

Finally, don’t forget megatrends like the energy transition. Energy prices might be high, but the shift to clean energy, energy storage, improved infrastructure and other technologies isn’t going away.

Oh, and yes, Buehlmann has clearly heard all the gags about Abrdn’s vowel-less name. When the firm came to rebrand after selling the Standard Life insurance business, it found that just calling itself Aberdeen was very difficult in the digital world where a Scottish city, a soccer club and a university all used that moniker. The Abrdn solution might have copped some criticism, but it’s worked; Buehlmann says the brand was ranked 48th for recognition in the UK a few years ago, but is now No. 2.

Related Posts