2017

2017

December 2017

Posted by Anton Murray Consulting on . Posted in 2017

2017: A Year In Review

Global growth is said to be headed for a 6-year high with expected growth reaching 3.7% for 2018. This sort of growth hasn’t been seen since 2011, with the last financial year also seeing the strongest growth in global trade since the GFC.

In Australia, the financial services and insurance sector has outperformed the growth of the overall economy, growing 4.5% over the last financial year. More broadly, the Australian economy grew just 1.8% over the same period.

This year the trend towards more sustainable and socially responsible investment decisions has continued to increase, with companies such as State Street Global Advisors deciding to step away from investments relating to tobacco and weapons. Earlier this year an Australia-based survey suggested that 69% of participants would prefer to invest in a super fund that considered ESG issues. Even sugar looks to be on the hit list.

Asia-Pacific is leading the world when it comes to IPO activity, with 65% of global IPO deals coming from this region this year. Hong Kong, China and Australia are the outstanding performers across Asia-Pacific.

The Funds Management sector in the region is going strong with consistently underperforming superannuation and managed funds in Australia falling by 18% over the last year. Australian pension funds’ funds under management also grew by 9% for the previous year.

Blockchain technology remains in the news with suggestions that it is “reinventing business“, and that it will soon have a huge effect on white collar jobs. With the ASX announcing that it will use a blockchain-based system (replacing CHESS) to “record who owns shares of listed companies, and to keep track of transactions and settlements when people buy and sell shares“, the future looks bright for this technology. It is set to change the way businesses work, making them move productive and more cost efficient.

Very recently in Australia, Prime Minister Malcolm Turnbull called for a royal commission inquiry into the banking industry following pressure from the Big 4 banks to restore the public’s faith in the big banks. It looks likely that the “comprehensive inquiry” will cover Australia’s banks, wealth managers, superannuation providers and insurance companies. AMP Capital have indicated that this comes at a time when other regions are looking more towards deregulation.

This has been another big year for major appointments across the region. As always, we are ready to assist you with your next career move across Sydney, Melbourne, Singapore and Hong Kong. Our contact details can be found on our website. Please reach out to us if we can help in any way. We wish you and your families a safe and happy holiday season and look forward to engaging with you again in the new year.

November 2017

Posted by Anton Murray Consulting on . Posted in 2017

We recently caught The Wizard of Lies, the HBO-produced TV movie about Bernie Madoff and the biggest Ponzi scheme in U.S. history, starring Robert De Niro. De Niro plays a cool, calm Madoff; engaging and charismatic enough to swindle billions from investors, and curiously swift to deflect any questions regarding the future of Madoff Securities when questioned by his sons. He was a Wall Street legend, which perhaps makes it easier to understand why he was able to continue the charade as long as he did. But ultimately it became too difficult to maintain when, as panic began to spread across the financial services world in 2008, people wanted to withdraw money that he simply didn’t have.

The film oscillates between Madoff’s interviews in jail with journalist Diana Henriques, late-2008 when the fraudulent scheme was beginning to unravel, and preceding years featuring lush penthouse apartments and parties in the Hamptons. De Niro skilfully plays the role of a man who duped his family, convincingly seduced investors to continue investing for many years, and even dodged a number of SEC investigations (albeit quite lax ones). You have to assume Madoff’s heart raced and he began to sweat under the collar every time he got close to being found out, but a cool De Niro shows the viewer that he rarely displayed any signs of being nervous.

There is a dramatic scene involving one of Madoff’s sons in the second half of the film where you realise the catastrophic effect that his deception had on his entire family. This is perhaps the catalyst for the viewer’s ill will and malevolence towards him. One can’t help but wonder how he could have been so naive to believe that his family would not get caught up in accusations and scrutiny should his Ponzi scheme be uncovered (or indeed, should he turn himself in). The intense media frenzy and harassment that came down on his wife, sons and their families was incredibly destructive. And we’re left wondering whether Madoff was simply blissfully ignorant or actually a high-functioning sociopath who cared only for his own success?

This film features a great performance from Robert De Niro, and equally convincing performances from the other starring actors. While watching, you find yourself at times studying De Niro’s face as if you were really studying Madoff’s, wondering what on Earth was going on in his head, behind his matter-of-fact, stoic façade. We’re not sure many people would finish this film feeling much empathy for the man who seemingly felt very little empathy for the large number of people that he took money from. Ultimately, people’s livelihoods were left devastated. People took their own lives. The Madoff scheme was a bit like a runaway bus and he is now paying the price, in the form of a 150 year jail term.

October 2017

Posted by Anton Murray Consulting on . Posted in 2017

Bond. Green Bond.

There’s been plenty in the news the last few years about the trend to move away from investing in alcohol, gambling, tobacco and firearms stocks. Well, “green” bonds are another way of making socially responsible decisions when it comes to investments. As the name suggests, green bonds are specifically in support of environmental or climate-related projects.

The World Bank issued the first green bonds in 2008 for approximately US$440 million, partly in response to demands from Scandinavian pension funds looking to support climate-focused projects. The Bank had also desired to combine investment and innovation in climate finance. It also allowed them to raise awareness among investors about how developing countries can stand to be affected by taking action on climate change.

In 2014 the Green Bond Principles (GBP) were established. They are a set of voluntary guidelines framing the issuance of green bonds and recognise several categories including renewable energy, energy efficiency, sustainable waste management, clean transport and sustainable land use. For green bonds to be valid, they need to abide by these principles.

Green bonds are not just for tree-huggers. The global green bond market is one of the fastest growing markets in the world, issuing nearly US$90 billion in 2016. Earlier this year,Apple issued a $1 billion green bond to help finance renewable energy and energy efficiency at its facilities and in its supply chain. As these billions of dollars in environment and climate-friendly funds continue to increase, the Australian government and corporations are following suit.

Over the last few years the amount invested in funds with some social or green investment principles grew from $US148 billion to $US516 billion across Australia and New Zealand alone, according to the Global Sustainable Investment Review. The report found that much of this growth was due to “professionally managed funds choosing to incorporate such principles into their main funds”. Funds specifically targeting green or social impact investors accounts for nearly 4% of Australia’s professional managed assets market. This is an increase from 2.5% in 2014.

ANZ’s ‘Green Property & Renewables Bond’ was the world’s first bond to be certified under the Low Carbon Buildings criteria of the Climate Bonds Standards. They issued the bonds in May 2015 with an oversubscribed $600 million offer, proceeds of which were used to finance green properties and wind and solar energy loans.

Ultimately, green bonds are a positive development for markets. They provide additional options when it comes to ethical, environmental and socially responsible investments. And, in a world where it’s no longer just hippies putting pressure on big business to be more responsible, it gives the issuers of these bonds the opportunity to show they have a conscience, and care about where the money comes from. With the increase in prominence of green bonds we expect to see recruitment in this space to contnue to increase, in line with the rising investment in ESG-related roles.

September 2017

Posted by Anton Murray Consulting on . Posted in 2017

Outsourcing HR: A Smart Move?

In a world where businesses are often looking to cut costs and increase efficiency, HR is one of many functions of a company that are increasingly being outsourced. Global Industry Analysts estimate that the global market for Human Resources Outsourcing is going to reach close to US$54bn by 2020. That’s only a couple of years away, and it goes to show that the appeal of reducing costs by outsourcing non-revenue generating functions to less expensive locations is too just too strong for many company directors to ignore.

Last year Optus reviewed the role of some departments, including HR, in an attempt to cut costs. And while the first industries to be outsourced a few years back were more technical ones, Human Resources is swiftly becoming a popular choice for companies keeping a keen eye on the bottom line.

It is often considered important to have the HR department readily available to deal with a variety of personnel issues easily and in person, but is this really required? The HR department, after all, is there to promote a healthy work culture, manage employee relations and assist with learning and development. But do they need to have a physical office, or can they be of just as much assistance remotely. It might sound tough, but they’re not there to be your friend, rather they’re employed to manage one of the many parts of the running of a business that ultimately wants to be profitable and efficient.

Whether or not to outsource is an important consideration given the financial capability and size of an organisation. It is important to consider more than just the cost saving measures, as outsourcing HR is a decision that will affect not only the balance sheet but also customers and clients, and most importantly – employees.

SOME OF THE PROS

1. Cost Savings
Outsourcing HR to lower cost countries significantly reduces the cost of nonrevenue-generating, back-office expenses. A fully functional HR department takes up office space, and more often than not means executives have to employ experienced and highly trained staff. If the choice is made to outsource HR, the outsourcing costs are variable and can be reduced when business needs demand it.

2. Efficiency
Having a productive and efficient workplace is critical. A good example is an electronic payroll system being far more productive than a human in its place. It means that management can focus more on improving the effectiveness of the workforce, as opposed to being caught up in paperwork.

3. Risk Management
Employment lawsuits have increased 400% over the last 20 years, and associated laws can be very hard and costly for an organisation, particularly financial organisations, to keep up with. Complex functions may be better managed by an external, overseas contractor, who is trained and educated specifically to deal with such legalities at a lower cost.

SOME OF THE CONS

1. Actual and Perceived Distance
Outsourcing HR to an offsite location can lead to a disjointed company culture. When the HR department is not easily accessible, employees can be left feeling unimportant and frustrated. This can lead to lower morale and thus, less output. It further creates feelings of insecurity – if the company can outsource the element of the organisation that cares for people, well then who’s next?

2. Poor Performance
The whole point of outsourcing is to reduce costs. However, lessened costs often lead to lesser quality of performance of the outsourced provider. It can also lead to frustration from clients wanting to deal with someone representing your business. The HR department is in charge of the daily operations of a company, and any poor performance from the provider will filter down into poor performance from the company as a whole.

3. Dependency and Loss of Control
Once a company outsources to a low-cost country, executives run the risk of giving up too much control over HR, or in fact becoming too dependent on the outsourced provider. Loss of control, or dependency, could create problems for the business, including a lack of company cohesion.

August 2017

Posted by Anton Murray Consulting on . Posted in 2017

Technology in Wealth Management: Friend or Foe?

For a while now Australian wealth has sat with the baby boomers but we’re seeing a shift towards younger millennials. What this means is that the needs and requirements of the industry are changing. Millennials are seeking increased efficiency and adaptation by established firms. Now more than ever, the retention of loyal customers must balance with clients demanding greater choice.

In the US, a huge $1 trillion each year passes down to younger generations and, according to UBS, millennials could be worth up to $24 trillion by 2020. In other words, investors under 50 are becoming more valuable to wealth and relationship managers. So, what does this mean for wealth management?

Over 60% of all retail banking transactions now occur online, and the finance industry is fast becoming one of the most digitised. Although traditionally high net worth clients have desired personal contact regarding their asset portfolio, this may no longer be the norm. Banking customers and clients are interacting with their banks via digital platforms much more often so it seems important and logical for wealth managers to utilise the power of online channels and social networks. In fact, a 2012 Forrester study showed that client-advisor relations via digital channels actually correlated to higher fees earned.

The lesson here is not that wealth management must wholeheartedly embrace digital channels and ignore traditional methods of communication. But it does appear that stronger client relationships, enhanced risk management and lower operating costs are achievable via the capitalisation of digital channels.

Digital technology can help clients connect with multiple sources of advice and multiple accounts which could in turn mean distinctly higher levels of investment activity for wealth managers. The key ingredients for stronger customer analytics, and crucially, future growth could lie in embracing the digital world.

Digital technologies have the propensity to answer unmet needs and ultimately provide clients with a superior experience, whilst simultaneously capitalising on evolving market prospects.

July 2017

Posted by Anton Murray Consulting on . Posted in 2017

Later this year a new law will be introduced in New York City by Mayor Bill de Blasio, whereby companies will no longer be able to ask prospective employees about their past salary earnings or any other related compensation. The law, which the Mayor has described as a “milestone achievement”, is being introduced in an effort to prevent workers’ possible earnings from being constrained by previous underpayment. Currently employers are able to learn what someone is earning, thereby getting an indication of what salary level that person is likely to accept in order to move, irrespective of what the new role may entitle them to. In the past this ability has enabled employers to underpay, which creates a cycle of underpayment for these workers as their next employer then has that same leverage.

The law is being introduced in an effort to reduce pay inequality particularly for historically underpaid demographics of the workforce like women and people of colour. It aims to reduce this by essentially wiping the wage history of workers and creating a scenario where pay will be based on merit and will become a better reflection of the work being done. Whilst hiring policies may possibly still be laden with some level of discrimination, it is hoped that this will reduce significantly over time. The aim is to eliminate, or at least reduce, the cyclical underpayment of some employees which has led to a large wage gap.

Interestingly, the bill doesn’t address internal employees who may be applying for a role within their company. This may allow employers to continue to underpay as they are aware of their internal candidates’ salaries. This may result in employers seeking to hire from within more than before, while employees may choose to seek more external opportunities than before in search of fairer salary compensation. It will be interesting to see how this mismatch plays out in financial services.

What implication this bill will have on global standards and procedures, particularly for us in Asia Pacific, is yet to be seen, however Wall Street has long been established as the heart of the global financial community and it will interesting to observe whether more governments around the world adopt this approach as a way to combat their own wage inequality problems. We’ll be keeping watch to see if other global or Wall Street based banks adopt this as a global policy and roll it out in our own region. It may cause a strange distorted market where some businesses are able to obtain salary information and others are not. A global roll-out would certainly indicate a successful bill and would provide good scope as to the level of wage discrimination in the Asia-Pacific markets.

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* Prior invoiced clients across the region.