[GRTV] Richard James reflects on the past 10 years at NZ Funds

Out-going NZ Funds Management chief executive Richard James talks about his time at the helm of the company, how it's changed in that time, the future and the biggest issues for advisers.

Thursday, August 9th 2018, 9:00AM

This episode is also available as an audio podcast. Listen now or download using the controls below:

When Richard James took over the helm of NZ Funds Management 10 years ago, just as the Global Financial Crisis was happening, things weren't well. While markets crashing were one issue, to deal with so too were some of the earlier business decisions.

As James says in his interview with GRTV; "When I took over it would be fair to say that some of the decisions we'd made in the preceding decade hadn't worked out as we would have liked or our clients would have liked."

That lead to a deep reflection on previous decisions, fronting up to clients and consequently transitioning the business from a product-based investment management firm to one which is now an integrated wealth management business.

"It's quite a different business (now)," he says.

NZ Funds's investment approach is to be global investors with a value orientation and with downside mitigation.

"We have a value orientation because over time buying cheaper stocks has proven to produce higher risk-adjusted returns than buying expensive stocks."

James says NZ Funds's approach is around client outcomes and objectives. "The performance of the fund is less important to us than the performance of the individual investor."

One of the biggest issues facing advisers is succession planning and that is something which NZ Funds is working on providing solutions to advisers.

The big opportunity, he explains in more detail in the video, is KiwiSaver.

James is very upfront and says that funds management, advice and administration expenses are too high and have to come down. In the video he talks about ways that may change in the future.

While many people argue about what is the best investment approach, James says there isn't just one winner.

"I think in the industry there's too much focus on what is “best” and I don't think there is an individual approach which is best. I could argue vehemently for an entirely passive approach, I could argue vehemently for a quantitative approach, or I could argue vehemently for an active approach. I could argue vehemently for a longterm strategy using property. So I don't believe any one of them is right or wrong."

"It's really dangerous in our industry to focus on absolute truths."