The active versus passive debate is outdated
CEO of Satrix
The active vs passive debate: what is your take on the argument?
I think the argument is outdated. Satrix’s stance has always been that there is space for both strategies in a well-diversified investment portfolio. The choice of product really depends on the need. As an industry we should be spending this time on showing clients how to integrate all these possible choices and take index tracking from a great idea into implementation.
The more disturbing media attention is the one about fees. I am frequently seeing articles making fee comparisons between various passive products which are often more obtuse than truthful and have the damaging net result of leaving the investor wondering what the real story is – is index tracking really a cheaper option? The confusion comes in when comparing various access routes, size of accounts and advice fees. While these are important fees to focus on, they are not uniquely an index tracking fund issue and investors wanting to invest in active funds will face similar comparisons.
I think we do the industry and the investor who is desperately trying to understand what is not their primary field, a huge disservice by not making the comparisons simple and appropriate.
What advice would you have given your younger self coming into the investments industry as a new recruit?
Reflect on why you want to be in this industry. Test with yourself that you are entering the industry for the right reasons. Remember this profession will be an essential part of someone’s journey to financial freedom. You will be the custodian of their wealth. You can empower them to reach their dreams… or not. If you don’t have a deep-seated passion for the money and the person entrusting you with their livelihood, no perfectly designed business strategy, no product or service, not enough money in the world can uphold that moral duty you have been entrusted with. This true passion for something more meaningful than your own personal success will give you enough strength and motivation to tackle any challenge or overcome any hurdle thrown at you until the day you retire!
What traits do you think are most important to have as an investment professional – and a woman in a male-dominated field?
This quote by Steve Jobs says it all for me:
“That’s been one of my mantras – focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” – Steve Jobs
My take out for investment professionals is that we need to listen, process and learn without end. We need to question and challenge – yourself, others and the system, and then make it simple.
As a woman, just focus passionately on your job as an investment professional and forget about the noise. Be authentic and true to yourself.
POSTED : 8 DECEMBER 2016