From Brexit to women on boards - the five main takeaways from Helena Morrissey’s Q&A at the PLSA Investment Conferene
As well as being the CEO of Newton Investment Management, Helena Morrissey is the chair of the Investment Association, founder of the 30% Club and has recently been appointed by the chancellor to the UK’s Financial Services Trade and Investment Board.
Clearly - she knows her way around the pensions and investment industries.
She spoke at the PLSA’s Investment Conference in Edinburgh, answering questions on everything from diversity to climate change.
Here are the main five takeaways.
1) There are too many links in the chain between asset managers and members
The pensions industry is huge. Working on any one person’s pension scheme there’s usually a whole army of investment professionals, consultants, lawyers, advisers, platform providers, IFAs and trustees.
There’s an obvious experience gain from this – but there’s also a risk the member could get lost.
Morrissey said: It is quite easy to forget you’re doing something aimed at achieving a social good for a person… If we can increase the connectivity between what asset managers are doing and what savers want, that would be a good thing.”
The FCA is consulting on competition in the asset management sector. And while Morrissey thinks this is a positive step, she thinks that the organisation is missing a trick by not including IFAs and intermediaries. She argued that a more holistic approach is needed.
She doesn’t, however, think that the whole solution lies with regulators and government. She said: “I wouldn’t leave it up to the regulator. It’s up to us to hold a mirror up to ourselves.”
2) The investment industry still has a groupthink problem
Morrissey argues that organisations are waking up to the benefits of increasing diversity and attracting talent, but that it’s “only when they realise it’s do or die” that things will actually change.
And things do need to change. Morrissey used the 2008 crisis as an example of how things go wrong if there is too much groupthink in a sector.
She believes that more women on boards would help. She said: ”I’m a firm believer that women are different but equal and we work best when we’re together.”
3) …but diversity is not all about gender equality
Morrissey is keen to impress that diversity isn’t all about gender equality
And although she considers herself a feminist, Morrissey’s drive for female representation at higher levels actually starts with wanting cognitive diversity. She said: “women making up 50% of the population is a good place to start.”
But now she is turning her talents to other areas of diversity.
She announced that she is part of the launch of a new initiative to improve diversity in graduate recruitment. The movement will cover all areas of diversity – not just women. She said: “if we don’t try to fix the intake to get that cognitive diversity, we’re in real trouble… We need multiple points of view and that’s what we are trying to achieve.”
4) Climate change is a financial risk and it’s time we did something about it
Morrissey is firm on the topic of climate risk. She argued that not only is it a financial risk, but it’s one that the industry can see coming and do something about.
She told the audience: “Companies that are affected by this risk make up a third of not just the FTSE but all the listed securities around the world… Let’s use this opportunity to for once get ahead of a financial risk.”
She believes that the pensions industry can make a real difference on climate risk and that as the owners of listed organisations there is a responsibility to influence them – and indeed influence government policy – to make a change.
5) Brexit doesn’t have to be a heated political argument
At a conference where Brexit discussions have mostly been characterised by impassioned political rhetoric or stony silence, Morrissey is a breath of fresh air.
She argues that David Cameron set out a very compelling account of how the EU would develop, but that it hasn’t turned out that way.
Outside of her personal views (Morrissey talks of Flexit and suggests the UK could ‘consciously uncouple’ from the rest of Europe and go on to survive and thrive), she talks about the need for more rational discourse on Brexit.
She concludes: “It ends up getting quite political. We need to be more calm about it and think about what is the right thing to do.”