1 00:00:03,080 --> 00:00:05,809 Sean Aylmer: Welcome to the Fear and Greed Daily Interview. I'm Sean Aylmer. 2 00:00:06,590 --> 00:00:08,720 Sean Aylmer: We talk to a lot of asset managers on Fear 3 00:00:08,720 --> 00:00:11,420 Sean Aylmer: and Greed, they're investing and dealing with all asset classes 4 00:00:11,630 --> 00:00:14,180 Sean Aylmer: so they don't miss much in terms of opportunities and 5 00:00:14,180 --> 00:00:17,660 Sean Aylmer: market trends. But a new report from EY suggests asset 6 00:00:17,660 --> 00:00:20,870 Sean Aylmer: management itself could be in for a tough time, with 7 00:00:20,870 --> 00:00:24,110 Sean Aylmer: the next five years set to be particularly challenging. Lower 8 00:00:24,110 --> 00:00:27,020 Sean Aylmer: fees and higher spending on technology and new products could 9 00:00:27,020 --> 00:00:35,870 Sean Aylmer: impact profitability with some small and medium firms unable to survive. Rita Da Silva is EY's Oceania Wealth and Asset Management Leader. Rita, 10 00:00:36,020 --> 00:00:36,940 Sean Aylmer: welcome to Fear and Greed. 11 00:00:37,340 --> 00:00:38,660 Rita Da Silva: Thank you. Happy to be here. 12 00:00:38,940 --> 00:00:42,170 Sean Aylmer: Now, upfront, how do asset managers make money? 13 00:00:42,680 --> 00:00:46,129 Rita Da Silva: Yeah, so asset managers make money. They'll have assets under 14 00:00:46,130 --> 00:00:50,659 Rita Da Silva: management from various different sources, be it institutional or retail or 15 00:00:50,659 --> 00:00:54,830 Rita Da Silva: via intermediaries and platforms. And they will earn a management 16 00:00:54,830 --> 00:00:58,340 Rita Da Silva: fee on those assets under management. And then the aim 17 00:00:58,340 --> 00:01:02,000 Rita Da Silva: is those assets under management and the percentages that they 18 00:01:02,000 --> 00:01:04,490 Rita Da Silva: earn on that exceed their costs, which will be a 19 00:01:04,490 --> 00:01:08,840 Rita Da Silva: combination of fixed and variable costs. So that's really simplifying 20 00:01:08,840 --> 00:01:13,460 Rita Da Silva: the business model. So fees on AUM (Assets Under Management) need to exceed 21 00:01:13,459 --> 00:01:16,730 Rita Da Silva: fixed costs and therefore you can see that there's going 22 00:01:16,730 --> 00:01:20,030 Rita Da Silva: to be a certain level of AUM needed and where scale 23 00:01:20,030 --> 00:01:23,450 Rita Da Silva: plays an advantage in that. And then, of course, many 24 00:01:23,450 --> 00:01:27,170 Rita Da Silva: asset managers will still charge performance fees. So that really 25 00:01:27,170 --> 00:01:30,140 Rita Da Silva: will be the icing on the cake where they outperform 26 00:01:30,140 --> 00:01:33,320 Rita Da Silva: a certain agreed benchmark. And that is really something that 27 00:01:33,350 --> 00:01:36,289 Rita Da Silva: they will strive for that really adds to their bottom 28 00:01:36,290 --> 00:01:37,310 Rita Da Silva: line profitability. 29 00:01:37,640 --> 00:01:40,459 Sean Aylmer: OK, if you take the initial idea of the fees 30 00:01:40,459 --> 00:01:43,430 Sean Aylmer: on assets managed, so what is, typically, so there's one 31 00:01:43,430 --> 00:01:46,880 Sean Aylmer: hundred billion dollar fund out there or asset manager with 32 00:01:46,880 --> 00:01:49,820 Sean Aylmer: one hundred billion dollars under management. Are we talking like 33 00:01:49,820 --> 00:01:51,810 Sean Aylmer: one per cent or half a per cent or three per cent? 34 00:01:52,160 --> 00:01:54,980 Rita Da Silva: Well, there is still a range in place. And if you 35 00:01:54,980 --> 00:02:00,020 Rita Da Silva: move right down to the passive asset classes in terms of, 36 00:02:00,020 --> 00:02:02,690 Rita Da Silva: for example, ETFs (Exchange Traded Funds), some of those are now only at 37 00:02:02,780 --> 00:02:05,360 Rita Da Silva: 20 basis points (0.2 per cent). And then you'll move up to the 38 00:02:05,360 --> 00:02:08,540 Rita Da Silva: more active ones where they really need to prove that 39 00:02:08,540 --> 00:02:11,900 Rita Da Silva: they're adding value. And they might be around that one 40 00:02:11,900 --> 00:02:14,750 Rita Da Silva: and a half per cent. Probably not seeing much more 41 00:02:14,750 --> 00:02:17,000 Rita Da Silva: exceeding that one and a half per cent. But so it 42 00:02:17,000 --> 00:02:20,930 Rita Da Silva: really depends on the asset class, whether it's active, passive, etc. 43 00:02:21,770 --> 00:02:23,299 Rita Da Silva: So that would be the range. 44 00:02:23,540 --> 00:02:25,970 Sean Aylmer: And then the performance fees on top of that, they 45 00:02:25,970 --> 00:02:28,880 Sean Aylmer: may have like CPI (Consumer Price Index) plus five per cent. This is totally arbitrary. 46 00:02:28,880 --> 00:02:30,800 Sean Aylmer: I'm making this up. But if an asset management says 47 00:02:30,800 --> 00:02:33,320 Sean Aylmer: we're going to get you CPI plus five per cent and 48 00:02:33,320 --> 00:02:35,720 Sean Aylmer: if they get seven per cent, I presume the performance 49 00:02:35,720 --> 00:02:37,810 Sean Aylmer: fee on that extra two per cent is a lot higher. 50 00:02:38,090 --> 00:02:42,080 Rita Da Silva: That's correct. So that could be 20 per cent of the outperformance, 51 00:02:42,440 --> 00:02:45,260 Rita Da Silva: which is widely seen as the icing on the cake. 52 00:02:45,560 --> 00:02:49,370 Rita Da Silva: But most fund asset managers these days, and it is demanded 53 00:02:49,370 --> 00:02:53,060 Rita Da Silva: by their clients, will have high watermarks. So you might 54 00:02:53,090 --> 00:02:56,060 Rita Da Silva: outperform a benchmark this year, but you need to recover 55 00:02:56,060 --> 00:02:59,360 Rita Da Silva: any negative performance from prior years as an example. So they 56 00:02:59,360 --> 00:03:01,070 Rita Da Silva: are becoming a lot more common as well. 57 00:03:01,419 --> 00:03:04,640 Sean Aylmer: OK, so the report for 2020 on asset managers, what 58 00:03:04,639 --> 00:03:05,780 Sean Aylmer: were the key findings? 59 00:03:06,360 --> 00:03:08,870 Rita Da Silva: So it's quite a comprehensive report. So I'll pick out 60 00:03:08,870 --> 00:03:11,990 Rita Da Silva: a couple of key findings from there. So that global 61 00:03:11,990 --> 00:03:14,480 Rita Da Silva: report is one that looks at our future outlook of 62 00:03:14,480 --> 00:03:17,570 Rita Da Silva: asset management over the next five or so years. And 63 00:03:17,570 --> 00:03:20,720 Rita Da Silva: it would be fair to say that the COVID-19 pandemic 64 00:03:20,720 --> 00:03:23,299 Rita Da Silva: has added to the structural prejudices that have been driving 65 00:03:23,300 --> 00:03:26,240 Rita Da Silva: the industry really towards an inflection point. I think the 66 00:03:26,240 --> 00:03:29,450 Rita Da Silva: next five years will see the speed of that change accelerate, 67 00:03:29,450 --> 00:03:32,240 Rita Da Silva: pushing firms to do more with less. So we're going 68 00:03:32,240 --> 00:03:36,140 Rita Da Silva: to see competition and regulation will erode fees in every asset class 69 00:03:36,320 --> 00:03:39,380 Rita Da Silva: and there is a shift to lower margin strategies. And 70 00:03:39,380 --> 00:03:42,560 Rita Da Silva: then there's also the economic and demographic factors are likely 71 00:03:42,560 --> 00:03:46,580 Rita Da Silva: to reduce net inflows compared to historic levels. And we're 72 00:03:46,790 --> 00:03:49,160 Rita Da Silva: going to continue to see a need to invest in 73 00:03:49,160 --> 00:03:51,920 Rita Da Silva: new products and technology, which is going to push up spending. 74 00:03:51,950 --> 00:03:55,760 Rita Da Silva: So that's really going to put pressure on the profitability, 75 00:03:55,760 --> 00:03:59,060 Rita Da Silva: the margins that asset managers make. And then we've done 76 00:03:59,060 --> 00:04:01,220 Rita Da Silva: a bit of modelling on that and I'm just pulling 77 00:04:01,220 --> 00:04:03,470 Rita Da Silva: out one of those on the base case scenario where 78 00:04:03,470 --> 00:04:06,770 Rita Da Silva: we're still assuming that assets under management grows by about 79 00:04:06,770 --> 00:04:10,310 Rita Da Silva: 15 per cent, we still expect that operating margins will 80 00:04:10,310 --> 00:04:12,610 Rita Da Silva: decrease by just under one per cent. 81 00:04:13,040 --> 00:04:15,830 Sean Aylmer: OK, so 15 per cent. So part of that will be 82 00:04:15,830 --> 00:04:19,670 Sean Aylmer: the market itself growing. And I know that last year 83 00:04:19,670 --> 00:04:22,450 Sean Aylmer: a big part of the jump was actually the market increasing, 84 00:04:22,460 --> 00:04:22,980 Sean Aylmer: is that correct? 85 00:04:23,300 --> 00:04:24,260 Rita Da Silva: That's right, yes. 86 00:04:24,500 --> 00:04:26,779 Sean Aylmer: And then the other part is just the flow of 87 00:04:26,779 --> 00:04:29,060 Sean Aylmer: new money into the industry. If we take some of 88 00:04:29,060 --> 00:04:32,450 Sean Aylmer: those things you're talking about. So why will margins be squeezed? 89 00:04:32,480 --> 00:04:33,710 Sean Aylmer: Is it a competition issue? 90 00:04:34,160 --> 00:04:37,550 Rita Da Silva: It's a competition issue. There's an element of the winner 91 00:04:37,550 --> 00:04:41,479 Rita Da Silva: takes all. So there's an element of scale, there's an 92 00:04:41,480 --> 00:04:46,010 Rita Da Silva: element of consolidation, et cetera. So there's a number of elements 93 00:04:46,010 --> 00:04:48,919 Rita Da Silva: around that's going to impact on that. And it's also 94 00:04:48,920 --> 00:04:54,320 Rita Da Silva: just asset managers realigning themselves and changing. So our report 95 00:04:54,320 --> 00:04:56,840 Rita Da Silva: shows that there's a number of things that asset managers 96 00:04:56,839 --> 00:05:01,219 Rita Da Silva: can do to prioritise and build up their profit margins and, for example, 97 00:05:01,570 --> 00:05:05,290 Rita Da Silva: one of those is realigning their business around what the 98 00:05:05,290 --> 00:05:08,380 Rita Da Silva: client needs and pivoting from being just a product provider 99 00:05:08,380 --> 00:05:11,470 Rita Da Silva: to becoming a solution provider and so those elements are 100 00:05:11,470 --> 00:05:15,039 Rita Da Silva: going to say certain asset managers thrive while others may 101 00:05:15,040 --> 00:05:16,240 Rita Da Silva: struggle a little bit more. 102 00:05:16,480 --> 00:05:18,570 Sean Aylmer: So when you talk about that, are you heading down 103 00:05:18,580 --> 00:05:21,040 Sean Aylmer: a financial planning path? Are those asset managers heading down 104 00:05:21,040 --> 00:05:22,210 Sean Aylmer: a financial planning path? 105 00:05:22,510 --> 00:05:26,860 Rita Da Silva: Look, within Australia, there is, asset managers will have a 106 00:05:26,860 --> 00:05:31,210 Rita Da Silva: number of areas that they can focus on and some 107 00:05:31,210 --> 00:05:33,880 Rita Da Silva: will try and do it all. And some may just 108 00:05:33,880 --> 00:05:37,540 Rita Da Silva: try and look at their niche areas. So they could 109 00:05:37,540 --> 00:05:41,619 Rita Da Silva: just be focused on institutional investments. So that would be predominantly, 110 00:05:41,620 --> 00:05:46,090 Rita Da Silva: if we look at Australia, asset management for superannuation funds, 111 00:05:46,330 --> 00:05:48,520 Rita Da Silva: but they could be doing a retail one, which will 112 00:05:48,520 --> 00:05:52,330 Rita Da Silva: be via platforms and intermediaries such as financial planners and 113 00:05:52,330 --> 00:05:55,690 Rita Da Silva: building up that one. Keeping in mind that also generally 114 00:05:55,690 --> 00:06:00,310 Rita Da Silva: margins or fees on retail tends to be more than institutional. 115 00:06:00,790 --> 00:06:03,300 Sean Aylmer: OK, so I'm just trying to put all this together. 116 00:06:03,310 --> 00:06:06,820 Sean Aylmer: Are we going to see fewer smaller asset managers? Because 117 00:06:06,820 --> 00:06:09,429 Sean Aylmer: if there's this margin crunch and there's a demand to 118 00:06:09,430 --> 00:06:12,100 Sean Aylmer: push towards a service model rather than just a product model, 119 00:06:12,339 --> 00:06:14,500 Sean Aylmer: you probably need some sort of economies of scale to 120 00:06:14,500 --> 00:06:17,320 Sean Aylmer: see that, plus there's all the regulatory push from APRA and 121 00:06:17,320 --> 00:06:19,599 Sean Aylmer: that for the big funds at least to merge. So 122 00:06:19,600 --> 00:06:21,520 Sean Aylmer: do you think we'll end up seeing more bigger funds, 123 00:06:21,520 --> 00:06:22,359 Sean Aylmer: fewer smaller funds? 124 00:06:22,750 --> 00:06:25,060 Rita Da Silva: I think that would be a correct prediction, yes. 125 00:06:25,510 --> 00:06:28,240 Sean Aylmer: Right. So if I'm a retail investor, how should I 126 00:06:28,240 --> 00:06:30,620 Sean Aylmer: be thinking about an asset manager? How do I pick one? 127 00:06:31,120 --> 00:06:34,650 Rita Da Silva: Yeah, well, there's certainly still a lot out there. So, look, 128 00:06:34,660 --> 00:06:38,860 Rita Da Silva: I think you need to, retail asset manager needs to consider 129 00:06:38,860 --> 00:06:41,920 Rita Da Silva: a number of things. So they firstly need to understand 130 00:06:41,920 --> 00:06:45,219 Rita Da Silva: their own needs. It needs to be what is their portfolio, 131 00:06:45,220 --> 00:06:47,210 Rita Da Silva: what are their goals, what are they trying to achieve? 132 00:06:47,470 --> 00:06:50,830 Rita Da Silva: And so, unfortunately, whilst advice, that's probably a different discussion. 133 00:06:50,830 --> 00:06:54,610 Rita Da Silva: But whilst advice can be difficult to obtain by everyone 134 00:06:54,610 --> 00:06:59,080 Rita Da Silva: now in Australia, given the high cost of regulation and expectations, first, 135 00:06:59,080 --> 00:07:01,690 Rita Da Silva: you need to know what you need in your portfolio. 136 00:07:01,690 --> 00:07:04,120 Rita Da Silva: And then from there, you can choose an asset manager 137 00:07:04,120 --> 00:07:08,110 Rita Da Silva: that matches your asset class and your diversification goals. It's 138 00:07:08,110 --> 00:07:10,870 Rita Da Silva: not an easy question, but in retail, one may look at 139 00:07:10,870 --> 00:07:14,140 Rita Da Silva: the strength of the asset manager, the brand, the alignment 140 00:07:14,140 --> 00:07:18,340 Rita Da Silva: with their purpose and values. They may have non-financial goals, 141 00:07:18,370 --> 00:07:22,720 Rita Da Silva: which we've seen increases well around ESG (Environmental, Social, corporate Governance) factors, and they 142 00:07:22,720 --> 00:07:25,300 Rita Da Silva: may even sometimes be even willing to let go of 143 00:07:25,300 --> 00:07:28,929 Rita Da Silva: certain elements to get other elements that align with their 144 00:07:28,930 --> 00:07:33,520 Rita Da Silva: purpose and goals. You can't just choose on performance because, 145 00:07:33,520 --> 00:07:35,890 Rita Da Silva: as they say, past performance is not a predictor of 146 00:07:35,890 --> 00:07:38,320 Rita Da Silva: future performance. So I think you just need to really 147 00:07:38,320 --> 00:07:42,310 Rita Da Silva: align with the story and the brand of the asset manager. 148 00:07:42,610 --> 00:07:45,160 Rita Da Silva: How they have been tracking is important and of course, 149 00:07:45,160 --> 00:07:48,160 Rita Da Silva: the fees they're charging and how they deal with elements 150 00:07:48,160 --> 00:07:49,480 Rita Da Silva: such as performance fees. 151 00:07:49,690 --> 00:07:52,480 Sean Aylmer: Okay. You mentioned ESG then, and bringing the whole sustainable 152 00:07:52,480 --> 00:07:56,530 Sean Aylmer: investing idea into the discussion. Are more people interested in 153 00:07:56,530 --> 00:07:58,820 Sean Aylmer: sustainable investing now than 10 years ago? 154 00:07:59,230 --> 00:08:02,380 Rita Da Silva: Yes, they are. And it's researching this report and others 155 00:08:02,380 --> 00:08:06,820 Rita Da Silva: shows that it's actually been escalated globally by the pandemic. 156 00:08:06,820 --> 00:08:11,160 Rita Da Silva: So people are really just re-evaluating. Life has changed. I 157 00:08:11,170 --> 00:08:14,440 Rita Da Silva: know that's a cliche, but we're seeing changes in how 158 00:08:14,440 --> 00:08:19,450 Rita Da Silva: people work, shop, socialise, education, et cetera, and they are 159 00:08:19,450 --> 00:08:23,980 Rita Da Silva: starting to see more environmental and social factors. And we 160 00:08:23,980 --> 00:08:28,060 Rita Da Silva: are seeing a real increasing demand for those elements in 161 00:08:28,060 --> 00:08:31,390 Rita Da Silva: a person's portfolio, but also a demand on that from 162 00:08:31,630 --> 00:08:34,630 Rita Da Silva: the companies in their economy. So definitely seeing a lot 163 00:08:34,630 --> 00:08:36,069 Rita Da Silva: more in the ESG space. 164 00:08:36,550 --> 00:08:39,370 Sean Aylmer: Another thing that report talks about is sort of investing 165 00:08:39,370 --> 00:08:42,250 Sean Aylmer: in new areas of growth. And for people like me, 166 00:08:42,250 --> 00:08:44,590 Sean Aylmer: we think of bonds and shares and things like that. 167 00:08:44,800 --> 00:08:48,130 Sean Aylmer: But you hear lots about private markets, infrastructure, infrastructure I sort 168 00:08:48,130 --> 00:08:51,429 Sean Aylmer: of understand, they're big funds that invest in roads and 169 00:08:51,429 --> 00:08:54,400 Sean Aylmer: bridges and whatnot. But when you're talking about private markets 170 00:08:54,400 --> 00:08:56,740 Sean Aylmer: and some of those asset classes, what are they exactly? 171 00:08:57,100 --> 00:09:00,490 Rita Da Silva: So private markets will be, it could just be providing 172 00:09:00,490 --> 00:09:04,780 Rita Da Silva: an alternate to debt financing coming through. So we've seen 173 00:09:04,780 --> 00:09:08,080 Rita Da Silva: a number of credit funds, for example, increase. So that's 174 00:09:08,080 --> 00:09:11,680 Rita Da Silva: an element of private marketing where you're providing alternative debt 175 00:09:11,679 --> 00:09:16,980 Rita Da Silva: financing for venture capital, private equity companies, etc. So those 176 00:09:16,990 --> 00:09:19,720 Rita Da Silva: that are not listed but are looking to IPO (Initial Public Offering) in 177 00:09:19,720 --> 00:09:23,470 Rita Da Silva: the future or are looking at new models. So they could be, 178 00:09:23,470 --> 00:09:25,990 Rita Da Silva: a lot of them are aligned with the sustainability goals 179 00:09:25,990 --> 00:09:29,079 Rita Da Silva: as well. So that would be your private market category. 180 00:09:29,980 --> 00:09:31,960 Sean Aylmer: Stay with me, Rita. We'll be back in a minute. 181 00:09:36,900 --> 00:09:41,939 Sean Aylmer: My guest this morning is Rita Da Silva, (Oceania) Wealth and Asset Management Leader at EY. And then just 182 00:09:41,940 --> 00:09:44,969 Sean Aylmer: one final thing. The superannuation guarantee has risen from nine 183 00:09:44,970 --> 00:09:46,620 Sean Aylmer: and a half to 10 per cent, and it's due 184 00:09:46,620 --> 00:09:49,380 Sean Aylmer: to rise to about 12 per cent, I think by 2025. 185 00:09:49,770 --> 00:09:53,280 Sean Aylmer: That mandated increase in superannuation, though, that must help the 186 00:09:53,280 --> 00:09:54,130 Sean Aylmer: industry somewhat. 187 00:09:54,660 --> 00:09:59,130 Rita Da Silva: It does in Australia. We're quite a relatively unique market. So, yes, 188 00:09:59,130 --> 00:10:02,130 Rita Da Silva: that will definitely help the asset managers almost having a 189 00:10:02,130 --> 00:10:05,880 Rita Da Silva: captive of net inflows. And then it just becomes the 190 00:10:05,910 --> 00:10:10,110 Rita Da Silva: battle of securing those inflows into your funds and not 191 00:10:10,110 --> 00:10:11,040 Rita Da Silva: to another fund. 192 00:10:11,410 --> 00:10:14,250 Sean Aylmer: Yeah, just following on from that, because there's also legislation, in fact, it has 193 00:10:14,730 --> 00:10:17,699 Sean Aylmer: just passed, about best interest test. So you can't sort 194 00:10:17,700 --> 00:10:21,030 Sean Aylmer: of waste money as a fund manager. There's also legislation 195 00:10:21,030 --> 00:10:23,310 Sean Aylmer: down the track for what they call CIPRs (Comprehensive Income Products for Retirement) and their 196 00:10:23,309 --> 00:10:25,110 Sean Aylmer: whole idea is that if you're a super fund, you 197 00:10:25,110 --> 00:10:27,840 Sean Aylmer: actually have to have a strategy for someone in retirement 198 00:10:27,840 --> 00:10:30,150 Sean Aylmer: rather than just an account based pension. So the whole, 199 00:10:30,330 --> 00:10:32,460 Sean Aylmer: I suppose my point there, is there's lots and lots 200 00:10:32,460 --> 00:10:35,069 Sean Aylmer: of legislation that seems to always change as well that 201 00:10:35,070 --> 00:10:35,970 Sean Aylmer: affects these guys. 202 00:10:36,600 --> 00:10:40,650 Rita Da Silva: That's right. There's the Your Super, Your Future legislation, which 203 00:10:40,650 --> 00:10:45,900 Rita Da Silva: is coming in will significantly change the whole ecosystem of 204 00:10:45,900 --> 00:10:49,650 Rita Da Silva: superannuation and asset managers as a result. Asset managers also 205 00:10:49,650 --> 00:10:52,560 Rita Da Silva: need to take into account how they play in that 206 00:10:52,559 --> 00:10:56,100 Rita Da Silva: space and support the super funds and what they can 207 00:10:56,100 --> 00:10:59,130 Rita Da Silva: bring that's different to the super funds to meet those 208 00:10:59,130 --> 00:11:02,219 Rita Da Silva: changing expectations and goals and legislation. 209 00:11:03,240 --> 00:11:05,460 Sean Aylmer: It's interesting. As a man in their early 50s and I 210 00:11:05,460 --> 00:11:07,709 Sean Aylmer: was an economist by trade and a lot of my 211 00:11:07,710 --> 00:11:11,099 Sean Aylmer: peers went into funds management broadly and really over the 212 00:11:11,100 --> 00:11:13,829 Sean Aylmer: last 20 years or so, it really has been the 213 00:11:13,830 --> 00:11:16,020 Sean Aylmer: rock star industry, funds management. And I think a lot 214 00:11:16,020 --> 00:11:18,690 Sean Aylmer: of people have become very wealthy. You look now and I 215 00:11:18,690 --> 00:11:20,820 Sean Aylmer: suspect technology or something like that is really the rock 216 00:11:20,820 --> 00:11:23,910 Sean Aylmer: star industry. It's a maturer industry, but it's not that 217 00:11:23,910 --> 00:11:25,200 Sean Aylmer: easy an industry, I reckon. 218 00:11:25,590 --> 00:11:28,250 Rita Da Silva: It's not that easy. But you are right. We do 219 00:11:28,380 --> 00:11:30,840 Rita Da Silva: see a lot of entrants come in. I think we're 220 00:11:30,840 --> 00:11:33,000 Rita Da Silva: starting to see a lot more models. And part of 221 00:11:33,000 --> 00:11:36,720 Rita Da Silva: what's in our report is transforming your business model. And 222 00:11:36,720 --> 00:11:40,200 Rita Da Silva: growth is not just around inorganic acquisition. It is also 223 00:11:40,200 --> 00:11:43,559 Rita Da Silva: around the opportunity to partner in different ways with different 224 00:11:43,559 --> 00:11:48,030 Rita Da Silva: organisations and combine your expertise. So you don't need to 225 00:11:48,030 --> 00:11:51,930 Rita Da Silva: just be coming in and being a small player in 226 00:11:51,929 --> 00:11:55,800 Rita Da Silva: Australian equities. You could partner with another firm that doesn't 227 00:11:55,800 --> 00:11:58,770 Rita Da Silva: have that asset class and work in a more strategic 228 00:11:58,770 --> 00:12:01,920 Rita Da Silva: manner in that way. So, yes, we do see people 229 00:12:01,920 --> 00:12:04,500 Rita Da Silva: still feel that they can come in and make it 230 00:12:04,500 --> 00:12:08,040 Rita Da Silva: work and build a model that is reliant on everything 231 00:12:08,040 --> 00:12:10,949 Rita Da Silva: else other than asset management being outsourced. But I think 232 00:12:10,950 --> 00:12:13,620 Rita Da Silva: we will see over the next five years more creative 233 00:12:13,620 --> 00:12:17,400 Rita Da Silva: ways of entering the market. Just to take into account, 234 00:12:17,400 --> 00:12:21,090 Rita Da Silva: I guess, the cost of entry is getting higher as 235 00:12:21,090 --> 00:12:24,150 Rita Da Silva: each day goes by. And so that will need to 236 00:12:24,150 --> 00:12:28,080 Rita Da Silva: amend how people enter the asset management market fund from 237 00:12:28,080 --> 00:12:28,860 Rita Da Silva: a small base. 238 00:12:29,130 --> 00:12:30,719 Sean Aylmer: Rita, thanks for talking to Fear and Greed. 239 00:12:31,140 --> 00:12:33,000 Rita Da Silva: My pleasure. Thanks for having me, Sean. 240 00:12:33,309 --> 00:12:36,510 Sean Aylmer: That was EY's Wealth and Asset Management Leader, Rita de Silva. 241 00:12:36,750 --> 00:12:38,760 Sean Aylmer: This is the Fear and Greed Daily Interview. Join me 242 00:12:38,760 --> 00:12:41,100 Sean Aylmer: every morning for the full Fear and Greed podcast with 243 00:12:41,100 --> 00:12:43,540 Sean Aylmer: all the business news you need to know. I'm Sean Aylmer. 244 00:12:44,130 --> 00:12:44,910 Sean Aylmer: Enjoy your day.