1 00:00:03,900 --> 00:00:07,530 Jennifer Duke: Welcome to the Fear and Greed Business Interview. I'm Jennifer Duke. 2 00:00:07,890 --> 00:00:10,440 Jennifer Duke: One of the largest asset managers in the world is 3 00:00:10,440 --> 00:00:14,370 Jennifer Duke: expanding its presence in Australia. Natixis Investment Managers has more 4 00:00:14,370 --> 00:00:18,930 Jennifer Duke: than US$1.2 trillion dollars in assets under management globally. And while 5 00:00:18,930 --> 00:00:21,720 Jennifer Duke: it's been operating in Australia for the last 25 years, 6 00:00:21,780 --> 00:00:25,050 Jennifer Duke: its license is now expanding to promote directly to retail 7 00:00:25,050 --> 00:00:28,680 Jennifer Duke: clients and to provide more investment options for financial planners. 8 00:00:29,070 --> 00:00:31,080 Jennifer Duke: I wanted to find out more about how that works 9 00:00:31,110 --> 00:00:34,139 Jennifer Duke: and the opportunities that a global asset manager like Natixis 10 00:00:34,139 --> 00:00:38,640 Jennifer Duke: can provide for Australian investors. Remember, this is general information only. 11 00:00:38,729 --> 00:00:42,360 Jennifer Duke: You should definitely seek professional advice specific to your circumstances 12 00:00:42,360 --> 00:00:46,650 Jennifer Duke: before making investment decisions. Louise Watson is the Managing Director 13 00:00:46,650 --> 00:00:49,500 Jennifer Duke: and Country Head for Australia and New Zealand at Natixis 14 00:00:49,500 --> 00:00:52,769 Jennifer Duke: Investment Managers, a supporter of this podcast. Louise, welcome to 15 00:00:52,769 --> 00:00:53,429 Jennifer Duke: Fear and Greed. 16 00:00:54,029 --> 00:00:55,890 Louise Watson: Thank you so much, Jen. It's such a pleasure to 17 00:00:55,890 --> 00:00:56,580 Louise Watson: be here with you. 18 00:00:57,900 --> 00:00:59,520 Jennifer Duke: I'm really excited for you to take me through this 19 00:00:59,520 --> 00:01:03,389 Jennifer Duke: announcement. So Natixis Investment Managers is expanding its license. How 20 00:01:03,389 --> 00:01:05,009 Jennifer Duke: does that change how you operate here? 21 00:01:05,819 --> 00:01:10,289 Louise Watson: Yeah. We're really excited about this announcement because it changes 22 00:01:10,410 --> 00:01:14,520 Louise Watson: our focus really from being one that was very much 23 00:01:14,790 --> 00:01:18,540 Louise Watson: driven to serve institutional clients to now being able to 24 00:01:18,840 --> 00:01:22,920 Louise Watson: cover the whole market and the whole range of investors 25 00:01:22,980 --> 00:01:25,920 Louise Watson: that are in Australia. So now we can not only 26 00:01:25,920 --> 00:01:30,569 Louise Watson: offer our strategies to institutional investors, but also to wholesale 27 00:01:30,569 --> 00:01:34,530 Louise Watson: and retail investors, and we think that's a really exciting prospect. 28 00:01:35,580 --> 00:01:37,830 Jennifer Duke: That's a massive market expansion for you, isn't it? 29 00:01:38,700 --> 00:01:42,569 Louise Watson: It is. It's huge. But pleasingly, it was driven by 30 00:01:42,569 --> 00:01:46,979 Louise Watson: our clients. We were seeing demand or experiencing demand from 31 00:01:46,980 --> 00:01:50,970 Louise Watson: wholesale and retail investors asking us for access to some 32 00:01:50,970 --> 00:01:54,960 Louise Watson: of these more niche and diverse active strategies that we 33 00:01:54,960 --> 00:01:57,990 Louise Watson: have within our expert collective. And we refer to it 34 00:01:57,990 --> 00:02:01,379 Louise Watson: as an expert collective because we have more than 15 35 00:02:01,380 --> 00:02:05,729 Louise Watson: affiliates within that stable and over 200 strategies. So we 36 00:02:05,730 --> 00:02:08,850 Louise Watson: can really draw from all those experts that sit inside 37 00:02:08,850 --> 00:02:12,388 Louise Watson: that stable of affiliates. And I think that's what investors 38 00:02:12,389 --> 00:02:13,800 Louise Watson: are really wanting access to. 39 00:02:15,030 --> 00:02:17,339 Jennifer Duke: I think you're right. And we talk an awful lot 40 00:02:17,340 --> 00:02:19,828 Jennifer Duke: on Fear and Greed about the need for expert quality, 41 00:02:19,830 --> 00:02:22,798 Jennifer Duke: professional financial advice, particularly when it comes to the investment 42 00:02:22,799 --> 00:02:26,070 Jennifer Duke: opportunities that people are considering. How do you think that Natixis can 43 00:02:26,070 --> 00:02:27,929 Jennifer Duke: help broaden the advice that's available? 44 00:02:29,610 --> 00:02:33,510 Louise Watson: Enormously. We've seen a lot of the same names in 45 00:02:33,510 --> 00:02:38,340 Louise Watson: the asset management universe being offered to Australian investors, and 46 00:02:38,340 --> 00:02:42,600 Louise Watson: by offering some more diversity to that offering and niche 47 00:02:42,600 --> 00:02:47,940 Louise Watson: strategies, really adding to the toolkit of advisors, it helps 48 00:02:47,940 --> 00:02:52,560 Louise Watson: advisors to educate their investors and also provide them access 49 00:02:52,620 --> 00:02:55,380 Louise Watson: to these strategies that are going to help bolster their 50 00:02:55,380 --> 00:02:56,758 Louise Watson: savings in retirement. 51 00:02:57,450 --> 00:02:59,369 Jennifer Duke: So I'm quite eager to dig into a little little bit 52 00:02:59,369 --> 00:03:03,269 Jennifer Duke: more about that relationship between Natixis and financial advisors in Australia. 53 00:03:03,540 --> 00:03:05,130 Jennifer Duke: Can you talk a bit about the network that you 54 00:03:05,130 --> 00:03:06,989 Jennifer Duke: have at the moment and how that's broadening? 55 00:03:08,370 --> 00:03:12,478 Louise Watson: Absolutely. We're heavily engaged with a number of the major 56 00:03:12,480 --> 00:03:16,529 Louise Watson: advice firms as well as the consultants that take care 57 00:03:16,529 --> 00:03:20,519 Louise Watson: of those businesses. And we see that as a huge 58 00:03:20,520 --> 00:03:23,940 Louise Watson: growth area for us. We are really pleased with the 59 00:03:23,940 --> 00:03:26,669 Louise Watson: relationships that are in place now and we look forward to 60 00:03:26,669 --> 00:03:31,019 Louise Watson: growing those, but really it's being driven by their desire 61 00:03:31,020 --> 00:03:36,029 Louise Watson: to access these different strategies that exist within our global 62 00:03:36,029 --> 00:03:38,189 Louise Watson: network of asset managers. 63 00:03:39,089 --> 00:03:41,010 Jennifer Duke: And I'll get to those strategies in just a minute, 64 00:03:41,010 --> 00:03:42,810 Jennifer Duke: but there was a statistic that came up in the 65 00:03:42,810 --> 00:03:46,200 Jennifer Duke: Natixis Individual Investor Survey this year, which I was quite 66 00:03:46,200 --> 00:03:49,919 Jennifer Duke: interested in. It showed that 64% of Australian investors don't 67 00:03:49,920 --> 00:03:52,979 Jennifer Duke: know what happens to bonds when interest rates rise. Do 68 00:03:52,980 --> 00:03:55,170 Jennifer Duke: you think there's a lack of detailed investing knowledge in 69 00:03:55,170 --> 00:03:56,250 Jennifer Duke: Australia at the moment? 70 00:03:57,450 --> 00:04:00,930 Louise Watson: Jen, I was fascinated by this statistic. And initially, I 71 00:04:00,930 --> 00:04:05,669 Louise Watson: was really surprised because 64% is a high number. But 72 00:04:05,820 --> 00:04:08,400 Louise Watson: at the end of the day you're not really going 73 00:04:08,400 --> 00:04:11,969 Louise Watson: to be sitting around Googling what's the relationship between interest 74 00:04:11,969 --> 00:04:16,229 Louise Watson: rates and bond pricing. It's pretty dry material, but- 75 00:04:16,229 --> 00:04:16,349 Jennifer Duke: It's true. 76 00:04:16,350 --> 00:04:21,059 Louise Watson: ... it's an important one to understand now that equity markets are becoming a 77 00:04:21,059 --> 00:04:24,719 Louise Watson: little bit more challenging and it's harder to derive those 78 00:04:24,719 --> 00:04:28,199 Louise Watson: same investment returns that investors have been able to achieve 79 00:04:28,199 --> 00:04:31,620 Louise Watson: in the past. And advisors are going to be looking 80 00:04:31,620 --> 00:04:36,000 Louise Watson: to bond strategies like global bonds or high yielding fixed 81 00:04:36,000 --> 00:04:38,969 Louise Watson: income strategies to offer to their investors. And it's really 82 00:04:38,970 --> 00:04:43,290 Louise Watson: important that investors have some sort of understanding of how 83 00:04:43,290 --> 00:04:47,938 Louise Watson: those strategies work in order to diversify their investment portfolios. 84 00:04:49,080 --> 00:04:51,000 Jennifer Duke: Do you think at the moment that Australians are a 85 00:04:51,000 --> 00:04:53,190 Jennifer Duke: bit limited in the way that they're investing their money 86 00:04:53,190 --> 00:04:54,659 Jennifer Duke: because of that lack of understanding? 87 00:04:56,220 --> 00:04:59,010 Louise Watson: Not really, because I think that that offering is being 88 00:04:59,010 --> 00:05:03,210 Louise Watson: brought through the advice network in a really effective way. 89 00:05:03,210 --> 00:05:05,520 Louise Watson: But what I do think is that there is a 90 00:05:05,520 --> 00:05:10,049 Louise Watson: massive opportunity for advisors, whether they sit within a superannuation 91 00:05:10,050 --> 00:05:13,229 Louise Watson: fund or whether they sit in an advice business to 92 00:05:13,230 --> 00:05:17,309 Louise Watson: step into that knowledge gap and provide education to their 93 00:05:17,309 --> 00:05:19,650 Louise Watson: clients and really help them on that journey. 94 00:05:20,130 --> 00:05:21,928 Jennifer Duke: Stay with me, Louise. We'll be back in a minute. 95 00:05:21,928 --> 00:05:31,289 Jennifer Duke: I'm talking to Louise Watson, the Managing Director and Country 96 00:05:31,290 --> 00:05:34,440 Jennifer Duke: Head for Australia and New Zealand at Natixis Investment Managers. 97 00:05:35,309 --> 00:05:37,859 Jennifer Duke: Do you think that that education role is something that 98 00:05:37,860 --> 00:05:39,839 Jennifer Duke: the financial advice community is aware that they need to 99 00:05:39,839 --> 00:05:41,459 Jennifer Duke: step into a little bit more? We've been through an 100 00:05:41,459 --> 00:05:44,160 Jennifer Duke: awful lot of, as you would well know, there's been 101 00:05:44,160 --> 00:05:46,080 Jennifer Duke: a lot of soul- searching about the role of financial 102 00:05:46,080 --> 00:05:48,480 Jennifer Duke: planning in Australia and how to grow that. Is that 103 00:05:48,480 --> 00:05:50,849 Jennifer Duke: where they can lean into it? Is it that education space? 104 00:05:51,660 --> 00:05:55,980 Louise Watson: Absolutely. And don't underestimate what your clients actually know. I 105 00:05:55,980 --> 00:06:00,239 Louise Watson: think in my experience, most people are not forthcoming to 106 00:06:00,240 --> 00:06:04,140 Louise Watson: say what they don't understand. And I think inviting that 107 00:06:04,140 --> 00:06:08,790 Louise Watson: discussion and offering all sorts of investment education, whether it 108 00:06:08,790 --> 00:06:13,320 Louise Watson: be the very basic fundamental knowledge, things like how do bonds work, 109 00:06:13,529 --> 00:06:17,279 Louise Watson: what's the relationship between interest rates and bonds, don't overestimate 110 00:06:17,279 --> 00:06:19,740 Louise Watson: what your investors know. And I think there's a real 111 00:06:19,860 --> 00:06:21,930 Louise Watson: thirst for knowledge out there, whether it be on the 112 00:06:21,930 --> 00:06:25,740 Louise Watson: basics or whether it be very technical investment information. And 113 00:06:25,740 --> 00:06:29,130 Louise Watson: that's something that we can all lean into and provide 114 00:06:29,130 --> 00:06:30,180 Louise Watson: to our clients. 115 00:06:30,928 --> 00:06:32,759 Jennifer Duke: And if we were to sort of zoom out and 116 00:06:32,759 --> 00:06:35,429 Jennifer Duke: look at this on a global scale, how do Australians 117 00:06:35,430 --> 00:06:38,190 Jennifer Duke: compare to other markets in terms of their knowledge and 118 00:06:38,190 --> 00:06:40,980 Jennifer Duke: their willingness to consider sort of alternative investments? 119 00:06:42,360 --> 00:06:44,639 Louise Watson: Well, I think the other statistic that came through was 120 00:06:44,820 --> 00:06:48,870 Louise Watson: only 18% of Australian respondents said they had invested in 121 00:06:48,870 --> 00:06:53,219 Louise Watson: bonds. That compares quite low compared to some of our 122 00:06:53,219 --> 00:06:54,479 Louise Watson: other global counterparts. 123 00:06:54,750 --> 00:06:57,330 Jennifer Duke: I think it's kind of interesting actually, that that proportion 124 00:06:57,330 --> 00:06:59,609 Jennifer Duke: is so low. Do you think that if we were 125 00:06:59,610 --> 00:07:02,099 Jennifer Duke: to do this same interview in sort of six months, 126 00:07:02,099 --> 00:07:03,960 Jennifer Duke: 12 months, that we would start to see that ticking 127 00:07:03,960 --> 00:07:05,220 Jennifer Duke: up? Is that part of your aim? 128 00:07:06,450 --> 00:07:10,679 Louise Watson: Definitely. And bond markets, and we're not just talking about 129 00:07:10,680 --> 00:07:13,949 Louise Watson: bonds here, but other asset classes outside of equities and 130 00:07:13,949 --> 00:07:17,640 Louise Watson: real estate have started to gain a lot more traction 131 00:07:17,880 --> 00:07:21,900 Louise Watson: with investors because markets are becoming more difficult to navigate 132 00:07:22,230 --> 00:07:25,590 Louise Watson: and we can't be addicted to those returns that we've 133 00:07:25,590 --> 00:07:28,770 Louise Watson: had in the last 10 to 15 years. We need to start 134 00:07:28,770 --> 00:07:32,130 Louise Watson: looking outside of equities and the stock market to deliver 135 00:07:32,130 --> 00:07:34,980 Louise Watson: those returns. So I do expect to see a tick 136 00:07:34,980 --> 00:07:37,290 Louise Watson: up in some of these other asset classes. 137 00:07:37,950 --> 00:07:39,659 Jennifer Duke: And what sorts of asset classes do you think are 138 00:07:39,660 --> 00:07:42,270 Jennifer Duke: going to start taking out those top roles? 139 00:07:42,840 --> 00:07:45,268 Louise Watson: We're definitely seeing a lot of attention on alternatives and 140 00:07:45,270 --> 00:07:50,129 Louise Watson: private assets. Things like private equity, whether it's listed or 141 00:07:50,129 --> 00:07:56,639 Louise Watson: unlisted real estate, venture capital, and even sustainable investing through private assets. 142 00:07:56,639 --> 00:08:02,700 Louise Watson: So private equity in the ESG space, all of those 143 00:08:02,700 --> 00:08:05,760 Louise Watson: asset classes are starting to be profiled more heavily by 144 00:08:05,760 --> 00:08:09,720 Louise Watson: advisors in order to offer that differentiated product and service 145 00:08:10,230 --> 00:08:12,420 Louise Watson: and access to investment returns. 146 00:08:13,230 --> 00:08:15,629 Jennifer Duke: So Louise, how do you see the balance between active 147 00:08:15,630 --> 00:08:17,220 Jennifer Duke: and passive investing at the moment? 148 00:08:18,719 --> 00:08:22,679 Louise Watson: Yeah. I think it's a really interesting dynamic between active and 149 00:08:22,680 --> 00:08:25,050 Louise Watson: passive. And when we talk about passive, Jen, we're talking 150 00:08:25,050 --> 00:08:29,160 Louise Watson: about things that include passive ETFs. They're very accessible, they 151 00:08:29,160 --> 00:08:33,750 Louise Watson: tend to be cheaper and they've grown rapidly in recent 152 00:08:33,750 --> 00:08:37,770 Louise Watson: years. And when we think about active management, you're talking 153 00:08:37,770 --> 00:08:43,530 Louise Watson: about asset management strategies like an Australian equity fund that's 154 00:08:43,530 --> 00:08:48,360 Louise Watson: managed by a group of portfolio managers. And I think now that markets 155 00:08:48,360 --> 00:08:52,530 Louise Watson: are becoming challenging, you need to be able to rely 156 00:08:52,530 --> 00:08:55,799 Louise Watson: on that team of portfolio managers to actively manage the 157 00:08:55,799 --> 00:09:01,710 Louise Watson: portfolio to avoid certain stocks or avoid those pitfalls and 158 00:09:01,710 --> 00:09:04,588 Louise Watson: move away from the benchmark rather than being in a 159 00:09:04,590 --> 00:09:09,300 Louise Watson: passive ETF that is tracking the benchmark. So I think 160 00:09:09,870 --> 00:09:14,490 Louise Watson: what we're expecting is active management to pick up, again, 161 00:09:14,520 --> 00:09:19,199 Louise Watson: as investors look to have more control over their investments. 162 00:09:20,369 --> 00:09:22,350 Jennifer Duke: And I'm curious around whether or not you have any 163 00:09:22,350 --> 00:09:26,069 Jennifer Duke: thoughts on the international sustainability standards that are coming out. 164 00:09:26,070 --> 00:09:29,880 Jennifer Duke: I believe they're coming out here relatively soon. Is that 165 00:09:29,880 --> 00:09:32,880 Jennifer Duke: going to make it easier for Australian investors to compare, 166 00:09:33,450 --> 00:09:36,059 Jennifer Duke: I guess, the sustainability profile of different businesses and different 167 00:09:36,059 --> 00:09:37,920 Jennifer Duke: opportunities on a global basis? 168 00:09:39,270 --> 00:09:41,940 Louise Watson: We hope that that is the case. This is definitely 169 00:09:42,059 --> 00:09:47,130 Louise Watson: a landscape that is evolving and changing rapidly. But what 170 00:09:47,130 --> 00:09:51,330 Louise Watson: we have seen at the institutional level is net- zero 171 00:09:51,630 --> 00:09:55,620 Louise Watson: investing and net- zero targets being put in place across 172 00:09:55,740 --> 00:09:59,730 Louise Watson: whole of portfolios. And it's going to take a lot 173 00:09:59,910 --> 00:10:04,230 Louise Watson: of work to reach those net- zero targets. And institutional 174 00:10:04,230 --> 00:10:06,809 Louise Watson: investors are putting those steps in place in order to 175 00:10:06,809 --> 00:10:10,679 Louise Watson: reach those goals. And asset managers such as Natixis, play 176 00:10:10,679 --> 00:10:13,588 Louise Watson: an important role in offering strategies to help them meet 177 00:10:13,589 --> 00:10:18,360 Louise Watson: those targets. So when we think about the advice network and how 178 00:10:18,360 --> 00:10:22,770 Louise Watson: that filters down to individual investors, individual investors are certainly 179 00:10:22,770 --> 00:10:24,929 Louise Watson: giving a lot more thought about how they can achieve 180 00:10:24,929 --> 00:10:28,920 Louise Watson: that in their own portfolios. So again, that's another education 181 00:10:28,920 --> 00:10:33,660 Louise Watson: piece that we're seeing advice businesses step into in order 182 00:10:33,660 --> 00:10:38,069 Louise Watson: to help advisors and their clients understand those trends. 183 00:10:39,450 --> 00:10:42,090 Jennifer Duke: And one of the issues we're obviously facing is that 184 00:10:42,090 --> 00:10:44,939 Jennifer Duke: there just aren't enough advisors in Australia at the moment. 185 00:10:44,940 --> 00:10:47,969 Jennifer Duke: We need some more. We need more options for advice 186 00:10:47,969 --> 00:10:50,910 Jennifer Duke: for people. Do you have any thoughts about the ways 187 00:10:50,910 --> 00:10:53,940 Jennifer Duke: that we can encourage more financial advisors into the market 188 00:10:53,940 --> 00:10:56,250 Jennifer Duke: and ways that we can help revitalize that industry? 189 00:10:57,599 --> 00:11:02,610 Louise Watson: Well, I would start with encouraging more female graduates to 190 00:11:02,610 --> 00:11:03,779 Louise Watson: enter that landscape. 191 00:11:03,780 --> 00:11:04,500 Jennifer Duke: Definitely. 192 00:11:05,760 --> 00:11:08,610 Louise Watson: We are trying to do whatever we can in order 193 00:11:08,610 --> 00:11:12,838 Louise Watson: to increase diversity and encourage women into finance. So that's 194 00:11:12,840 --> 00:11:15,360 Louise Watson: certainly one way that we can do that. But it 195 00:11:15,360 --> 00:11:18,809 Louise Watson: is a really rewarding career path to be able to 196 00:11:18,809 --> 00:11:23,070 Louise Watson: help individual investors achieve their goals, not only their short- 197 00:11:23,070 --> 00:11:27,509 Louise Watson: term goals, while they're still accumulating savings, but also as 198 00:11:27,509 --> 00:11:32,910 Louise Watson: they move into retirement. Especially for women, knowledge is power. And women retire 199 00:11:32,910 --> 00:11:37,679 Louise Watson: with 24% less than men, and we expect that gap 200 00:11:37,679 --> 00:11:42,539 Louise Watson: to widen over time. So there's a huge role for 201 00:11:42,629 --> 00:11:46,110 Louise Watson: advisors to play in order to help people achieve those 202 00:11:46,110 --> 00:11:48,990 Louise Watson: goals. And I think that's a really rewarding prospect and 203 00:11:48,990 --> 00:11:52,380 Louise Watson: if we can encourage more people to take that path 204 00:11:52,380 --> 00:11:56,100 Louise Watson: and take up the challenge of being an investment advisor, 205 00:11:56,549 --> 00:11:59,819 Louise Watson: because we will need more going forward given the demographics 206 00:11:59,820 --> 00:12:00,420 Louise Watson: in Australia. 207 00:12:01,410 --> 00:12:04,078 Jennifer Duke: Definitely. Louise, thank you so much for talking to Fear 208 00:12:04,080 --> 00:12:04,560 Jennifer Duke: and Greed. 209 00:12:05,309 --> 00:12:07,559 Louise Watson: It's been an absolute pleasure, Jen. Thank you for having me. 210 00:12:08,220 --> 00:12:11,160 Jennifer Duke: And that was Louise Watson, Managing Director and Country Head 211 00:12:11,160 --> 00:12:14,699 Jennifer Duke: for Australia and New Zealand and Natixis Investment Managers, a supporter 212 00:12:14,700 --> 00:12:17,429 Jennifer Duke: of this podcast. This is the Fear and Greed daily 213 00:12:17,429 --> 00:12:20,910 Jennifer Duke: interview. Remember, this is general information only and you should get 214 00:12:20,910 --> 00:12:24,960 Jennifer Duke: professional advice before making investment decisions. Join us every morning 215 00:12:24,960 --> 00:12:27,540 Jennifer Duke: for the full episode of Fear and Greed, Australia's best 216 00:12:27,540 --> 00:12:31,530 Jennifer Duke: business podcast. I'm Jennifer Duke, economics correspondent for Capital Brief 217 00:12:31,559 --> 00:12:33,838 Jennifer Duke: and filling in for Sean Elmer. Have a great day.