127: Frontier Advisors' Kim Bowater – Consultants in a Changing Industry, AI and Gender Diversity

In this podcast, I’m speaking with Kim Bowater, who is the Director of Consulting at Frontier Advisors. Kim has spent 23 years at the firm and saw the asset consultant grow from a small advisory firm with just 13 people when she started in 2002 to the leading asset consultant it is today. She is one of the driving forces behind a number of key initiatives that have supported Frontier’s growth, including the establishment of a technology platform that allows clients to access research online and the initial set up of the retirement business.
In this episode, we discuss how the continuously changing industry affects the role asset consultants play, the impact of AI and gender diversity within the investment industry.

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 Overview of Podcast with Kim Bowater, Frontier Advisors

03:00 I come from a science family; I’m the only one that went into finance

06:00 When I joined Frontier there were 13 people

07:00 Frontier’s new independent CIO service

10:00 You led the first phase of Frontier’s technological overhaul that saw the implementation of a digital platform for clients. How did that come about? “I put my hand up.”

14:00 We are a reasonably open book in terms of our research and ratings

16:00 Does this platform allow you to address knowledge management of the organisation

15:30 We’ve developed an AI agent, called Frank, that allows us to access all of our data in a streamlined manner

20:30 Ashby Monk said asset consultants might be in trouble with the rise of AI. Do you agree? “No!”

23:00 You’ve started Frontier’s retirement business. What are your thoughts towards product development and investments?

25:00 Retirement is a meaty problem

26:30 Annuities haven’t been helped by the low-yield environment that we’ve had for so long, but in principle, we do think they have a role to play

32:00 The industry has changed quite a bit, how do you look at the future growth of Frontier? Where is it going to come from?

38:00 How do you look at the gender balance in the investment industry today?

 

Full Transcript of Episode 127

 

Wouter Klijn  00:00

Kim, welcome to the show. Thanks. How are you pretty good, pretty good. Thank you very much. Thanks for having me. So why asset consulting? I think you started originally out as a actuarial consultant. How did you become involved with the asset consultancy side?

 

Kim Bowater  00:18

Yes, well, I am, yes, I did maths at university and took up an actuarial consulting role, which was coming from a scientific kind of family, a bit of a leap into the unknown. It worked with defined benefit funds, so in the superannuation space. But after a few years, I felt like I was more attracted to the asset side rather than the the liability side. So started the CFA course, and then kind of naturally moved into to asset consulting. It was, it was relatively kind of organic, one step at a time, then then in an intentional path. But here, but here I am still.

 

Wouter Klijn  00:59

So what sort of science is your family into?

 

Kim Bowater  01:02

My father was a a senior lecturer of Applied Chemistry, and my mother was a Pharmacist, and she had a science degree as well. Yes. So there was no one in finance in my family. I thought, let's give something we've got. We don't know what it is, but we'll give it a go.

 

Wouter Klijn  01:20

Is that your form of rebellion?

 

Kim Bowater  01:22

 Yes, they were intrigued too,

 

Wouter Klijn  01:25

Fair enough. And now you've been with Frontier for 23 years, so you don't see that too much anymore in the finance industry, where everybody has like to be your gigs. So 23 years, that's, that's quite a long time. And you've, you've, now, you know, climbed all the way up to part of the leadership team, part of the Investment Committee, but when you sort of look back on that period, was there anything that stood out for you? Is like, these are some of my standout moments?

 

Kim Bowater  01:55

Yeah, I mean, it's, it's been a good journey. I think Frontier also changed a lot, and our clients, particularly in the Super space, have changed a lot over 23 years. So it feels like a role that's had a lot of change in it, rather than kind of just one firm. I think when I when I started, we were under the leadership of Fiona Trafford-Walker, who, you know, many people will still remember as a leader in the industry and frontier, had a had a really nice culture. I thought client focus, kind of team oriented, but forward looking, kind of challenging ourselves and and I think kind of one, it's not necessarily a serious tan at moment, but I'm quite proud of of the fact that we've managed to have a culture that's endured with those characteristics. That's something I'm quite proud of. Frontier has always been a good place to be part of, and we still hear that today.

 

Wouter Klijn  02:58

Yeah, I think Fiona was one of the first people that I interviewed, I think, for this podcast series A while ago. But yes, it's still one of my favourites.

 

Kim Bowater  03:08

I think also, you know, just thinking about the evolution of advice, the different environments we've been through, you know, COVID, GFC, all the evolution in the superannuation space that's impacted on investment processes and governance and portfolios is something that, you know, we've really focused on working with clients to help them succeed. And I think, you know, I feel that's been a really rewarding journey, I think, for funds themselves, as well as for ourselves, who are, who are also here to kind of create good outcomes for members. We've we've done very well, you know, in our in the external survey of asset consultants, which has been the Peter Lee survey for a long period of time, and that's always been a kind of standout moment for me and the team, you know, to receive really positive feedback from our clients that we're actually, you know, adding value, because you're always a step remote. Step removed as an advisor, in a way, I think, as well from, from looking at Frontier as it's grown, you know, when I joined, there was maybe 13 people. Oh, wow. It was a pretty small, you know, we all did something, you know, we did a range of things. It was mostly super now, you know, two thirds of our clients are outside of super across a whole range of areas. We're working with clients in New Zealand and Japan the Pacific. We have an office in Japan and now recently announced a new independent CIO service. You know, all of those are really significant kind of standouts.

 

Wouter Klijn  04:38

That was quite an exciting announcement. Because, I think to a degree, it does change the business of Frontier a little bit. Because I think so far, Frontier has been able to provide advice, but not necessarily implemented advice. And now with this team up, where you bring in the investment team of state Super 14 people come. Coming over, you actually will be able to implement that as well. It's quite a bit of an evolutionary step for the business. But what do you see, sort of the future? How, how do you think that this might add to growth?

 

Kim Bowater  05:12

Yeah, I mean, it's exciting. We've always, you know, we've been an independent, kind of institutional advisor, so not not having implemented product business, and we're going to continue to be an independent advice led consulting business. And this really, you know, in our mind, extends the reach of that it's not implemented product solution, but we have found that there are asset owners. It's less, less kind of common in superannuations that have grown and have internal teams, but outside of super and some at the smaller end, perhaps, you know, want external advice, want an institutional advisor, but don't really have all of the tools to implement it or execute a bit reporting or custody or execution. So this just provides some extra service levers that we can work with organisations that need those components. It's still, it's still advice LED. It's recommending portfolios that really align to their needs and objectives. And previously, the only other solution they've had is to go into an implemented, like a Balanced Fund, kind of wholesale, kind of group product. And this is, this was providing, I think, a really, potentially, really attractive solution. So from a from a growth standpoint, I think it extends the reach of our our institutional advice, to the border, to broader markets where they need some additional service capability as well.

 

Wouter Klijn  06:38

Yeah, yeah. And from what I understand, this mainly is targeted, sort of the smaller end of the spectrum, like the charities, maybe some family offices. Is that right? Yes, yeah. And does that also allow you to then tap more into sort of the private wealth space?

 

Kim Bowater  06:53

Yeah, potentially, we've been working in the private wealth space for a while now. That's obviously a growing area, and they're also, you know, a group's interested in in working with an organisation like us as they've got bigger so and they they also can have other additional needs, like reporting and various things that that this can assist with. So it just provides a greater flexibility of us to to help our clients with all of the different aspects that they need.

 

Wouter Klijn  07:25

Yeah, and it's very aligned structure as well, because State Super has now become a co-owner of Frontier, yes, and it's been a long-term client as well.

 

Kim Bowater  07:35

So it's yes, it's exciting and and to have you know a team with Charles and 14 people join us is really exciting, too.

 

Wouter Klijn  07:44

Yeah, yeah, for sure. So if I may take you back a little bit about your journey at Frontier and changing essence consultant environment, I think what I saw one big change that Frontier has gone through over the years is when it started to implement the technology platform where, basically, clients could log in, find recommendations, find all sorts of information, and also with the help of a few foreign partners, I think, on this platform, and You were actually the one that led the first part of this project, weren't you? Yes, how did that come about?

 

Kim Bowater  08:26

I put my hand up, or it might have been volunteered. I can't quite remember. I mean, the the genesis of it really was we were, we were finding that, particularly in superannuation, as investment teams were growing, that there were the people that we were advising to that, you know, had their own, you know, had a range of working needs. So some of them would want, you know, direct, curated advice from us. Some of them wanted to do their own research, but leverage our breadth of work to do that. So technology really enabled a different mechanism in which kind of the work that we were doing in our research teams could be shared, and it could be utilised in a way that, you know, individuals wanted to. So the first project was really looking at the manager research database, and we had an internal system. But this was really looking at, well, how do we, how do we strengthen that and have a really good system that can be used externally? So it was, it was an interesting project. It took a lot of mapping, and I think it strengthened our own internal processes as well, and kind of built it out so it could be evolved from here. So be that into kind of areas like private wealth or offshore in Japan, it's been really good to have done that, that really early work. And it's It now includes, that was just the database really to start with, but it includes a range of kind of tools and and systems, portfolio analysis, you know, real life. Sets database all sorts of different things that we use internally and that our clients can use. So it's really added, I think, a dimension of flexibility in terms of how clients can work with us.

 

Wouter Klijn  10:12

Yeah, usually technology doesn't make the headlines in this space, but I remember quite vividly when I realised how important it was when I actually was doing an interview with one of your competitors, and the news had just come out, and I sort of brought it up, it's like, Oh, if you've seen the frontier is doing this, and they're like, it's crazy. We never, we never give our research reports out, and we have one copy, and we hold it very tightly. We never put anything online. And they just have a system where you can log in. And they thought, you know, this is going to make it really hard to get back and talk to fund managers, because if you give them a negative rating, they'll never talk to you again, and now you're just putting it all online. Was that ever a consideration, a conversation, that maybe the reports would more easily be disseminated?

 

Kim Bowater  10:59

I mean, it's a secure system, so we were not worried that it would kind of be available to everyone. But, I mean, ultimately we were, we were not, you know, closed about, you know, what our ratings were. So if we were asked by a manager, we would, we would talk about that. So I think we've always kind of taken an approach of, you know, we've all got a role to play in working with with asset owners, and we should be transparent about how we're thinking about things. And, you know, I think that builds better relationships, even if you start with a negative rating or not rated situation we were, I mean, there is a, there is something to be said around, you know, do you want to do? Do you want to do all your thinking and work before you kind of get into a communication with a client about a new idea, or manage a recommendation, or, you know, investing in Bitcoin, you know, that sort of thing. Do you want to kind of have done lots of work before you even have that conversation. Whereas this has all that meeting notes, it has a whole range of things. It has thoughts processes in along the journey, so to speak, and and so that was a conversation, because I think when you're just providing advice, you kind of do a short list. So it's managers, you do a short list, you provide a recommendation, and it's kind of the end of the process. But we were finding, you know, particularly for asset owners, with super teams, with client with teams, investment teams, with more sophisticated internal processes as well. You know, they were wanting to have a conversation very early in the stage in the process. And so, you know, we're a reasonably kind of open book. We'll start kind of with, you know, we we have, we've got these questions about a topic, and then, you know, ultimately you get to the end of a rating or a view to invest. But I think it's important, with all the questions in the world and things that we don't know, investments are, you know, inherently uncertain in terms of where they'll go in the future. So I always think, you know, being able to ask the difficult questions that you don't know the answer to is just as useful as you know, having done all the work and having the final answer that you think

 

Wouter Klijn  13:15

yeah, so you haven't got any pushback from managers on...

 

Kim Bowater  13:15

No, no. And you know, we try and you know, we try and be transparent. We, you know, in terms of not just our ratings, but, you know, areas of focus as well. With our research programme, there's a lot of managers and products out there. We can't cover everything. So we just think it's useful to have a two way dialogue with that universe. And yeah, no, they haven't. They haven't had any any particular pushback, yeah.

 

Wouter Klijn  13:44

So it started out as sort of organising the database, but over the years, it has grown quite a bit. And I think you already mentioned there's a lot of different tools in it, meeting notes. What is your current thinking about what sometimes referred to as knowledge management, because, to a degree, it retains the institutional memory of Frontier as a business as well, where, I think previously, sometimes when you know in an organisation, when when somebody leaves a lot of information leaves with them, but having this in place, in sort of central place, does retain some of that has your sort of ideas about knowledge management changed in that perspective.

 

Kim Bowater  14:28

Look, I think it's been, it's been an ongoing quest, you know, to manage your data and knowledge well. And you know, technologies continue to evolve. We're in a process of really centralising all of the data and and knowledge and past work that we've done on the cloud, and really looking, you know, you need efficiency of data access, security, data governance and being able to extract better insight. So having things. Obviously dotted about in in the manner of old, is is not the best way to extract data. And so we're, we're in the middle of a centralization project at the moment. We've also got a private AI tool, which we've called Frank, after an internal competition

 

Wouter Klijn  15:20

I've met Frank, I think, at the last annual conference.

 

Kim Bowater  15:24

And you know that that that allows that kind of data set and knowledge to be to be accessed through that tool and and for all of us, really, in a more streamlined manner?

 

Wouter Klijn  15:36

Yeah, now AI is something that is obviously on a lot of people's minds in a moment more whether it's a bubble and it's about to burst. In terms of application to this, to the data, where do you see the biggest gains? I mean, you just mentioned this agent that has been developed, but where do you see, sort of the biggest benefits? And part of the reason why I'm asking it is because I was reading a report recently from MIT, which basically looked into companies running AI pilots, and it's sort of concluded that 95% of businesses got no benefit out of it, which is not that great number. So keen to hear what your experience is.

 

Kim Bowater  16:20

Yeah, look. I mean, I think it's a, it's going to be a journey, and we're in a really, really relatively early phase. So, you know, Frank, for us, is a really useful tool to, I think it'll create efficiencies in data access. You know, it can apply style, kind of guide to it. So there's just a kind of wording benefit. We view generally AI just to kind of take a step back, it's as a strategic priority. We think it's an area where there's a lot of change, where we need to be thinking about what it means for our business. So we're working on that, that strategy at the moment, and we're also thinking about a lot from an investment and economic standpoint, I think we have a range of kind of projects underway. A lot of it's kind of in that kind of efficiency space, or in the can, can we use it to provide a different perspective to the one we might have come up with in a qualitative sense, and understand why? So it's a kind of robust, adding robustness to our own processes. But all of that's quite, quite new, and we're seeing it, you know, kind of expand out into so many different areas in the world and businesses. And there's obviously a governance and a risk aspect to it as well. So we're using it as a tool, a supplementary tool, but you know, I think we'll take learnings from that and continue to develop it from there, without kind of getting too ahead of ourselves on it.

 

Wouter Klijn  17:52

So I did a recent podcast with Ashby Monk from Stanford University, the long term investing Institute there, and he is very interested in AI, and in think he has some projects going on with some businesses on the side as well. But I basically asked him, Where do you think AI would fit within sort of the pension industry? And he started describing basically the idea that you could use it to get alternative viewpoints, in the sense that you could very specifically make it a specialist, but also more general at, you know, board type of advice. And he started describing where it could be used. And I said that again, this sounds like an asset consultant. And he sort of agreed. So I said, So are they in trouble? And he said, Oh, they might be. Are you? Are you worried about that it gets to a point where, you know, it replaces advice.

 

Kim Bowater  18:44

Yeah, no, no. Look. I mean, who knows, who knows where it will go, and I suspect you know potentially some of the power of it in things we can't, you know, yet envisage, but I do think it's potentially useful to provide separate different perspectives and all of those things, but investing is such a challenge, thinking about particularly the total portfolio and how all the different components come together, where the risks are, where the opportunities are, what the different competing things to weigh up, you know, risk and return and fees and all of the things, particularly in Super that you need to weigh up, you know, it's a complex problem, and AI, I think, should be useful in in processing some of that. But I don't think it takes away from, from, you know, the insight that an experienced investment person will will have, and I don't think, you know, investment committees will, you know, have an AI advisor that they'll be as comfortable with compared to a, you know, an experienced asset consultant, where they're looking for an independent perspective from their from their internal CIO.

 

Wouter Klijn  19:55

It can obviously lead to some efficiencies, but I think at the moment, as well, the system. We're still at a stage where it makes a lot of mistakes. Yeah. So I find that whenever I use it, I almost spend as much time correcting its mistake than I actually gaining in benefits. And it sort of has this idea that we still need more evolution in that space, because at the moment, it's like broadly right but specifically wrong. And yes, but I'm very interested in this space. So yeah, we'll be interesting to see what happens there. Another sort of big development is, you know, the retirement space. Obviously, the regulator has put out some requirements there for people to at least develop sort of a strategic plan. I mean, it has changed a few times. There were sippers. Now there is covenants, but the idea is that we need to basically have a more mature approach in that particular space. Now, I think you've also set up the retirement business for frontier. Tell me a little bit about how that started and what sort of your thinking is towards this space. Do we need a whole range of new products, or is it more tweaking for a specific set of circumstances?

 

Kim Bowater  21:13

Yeah, it was, yeah. Some time ago, we started to think about retirement in some ways, from an investment or product standpoint, given where we're from the investment side, and what, what that meant in terms of the member experience. What was different about it is the, you know, you think a lot about my super and different options and their collective vehicles, but retirement has a an, you know, a lot of of challenges that go to the individual member and what they need. And I think the so we, you know, life cycle is, is more common than it was back then. But that was something we we did some, some work on and, and then also, you know, in retirement, what, what does a member actually need? And what would that mean for for the investment product? And there's always that challenge around different circumstances and pension and all of that sort of thing. It's been really slow, I think, and in its evolution, part of it is, you know, there's been a range of other things that supers also been focusing on, but I think we're now getting into a stage where we are seeing, you know, the maturing of the system, lots of members moving into retirement and and so, you know, I can see why the regulatory focuses has been increasing. So the retirement income covenants now been out for three years, and I think what it's captured is the kind of multi dimensionality of the of the issue, you know, understanding the members need. So there's, there's a whole thing around, kind of, what data do you have on the members, the cohorting of members, how do you communicate with the members? Like, what, what is the fit for purpose assistance, which may go to product or advice? And then kind of, what's, how do you assess whether it's been successful? So moving, getting all of those elements lined up and interacting is a, you know, is a meaty challenge, and and when I think the the industry is is still working on but, yeah, it's not specifically, I think a product problem, though, obviously, investments need to be made and solutions need to be found. But it's, it's the combination of, you know, the advice putting understanding the cohort and their needs and then having their solution to put them in, the ongoing support from there.

 

Wouter Klijn  23:42

So there's been a lot of talk about the product space. And obviously one type of solution would be something that's akin to an annuity. But then again, I also think then of the UK experience, where for a long time, annuities were mandatory, and the moment they stopped that it was kind of like everybody. So they're not a very popular product for most people. Do you see a role for annuities, or are they just not popular enough?

 

Kim Bowater  24:10

Yeah, I mean, I think I've always felt like there's, they have a role as part of the solution for a particular type of member. We we've done a couple of kind of workshops with groups of funds over time, led by David Carruthers at Frontier, and one of those was about longevity and what a longevity solution would look like. And you know, because in principle, it does seem to make sense for those looking for some certainty, I don't think it's been helped by kind of being in such a low yield environment for so long, and where other markets have been so strong. Because I think when you weigh up the relative choice, maybe just being in a Balanced fund or a slightly more conservative fund looks pretty good and you don't have to lock up. Your money. It may be if we hit an environment where certainty, you know, has more value, that annuities will will have another, another kind of flush of interest, but, but I think the the most recent work that apron ASIC have done showed, you know, quite a lot of people approaching retirement age don't feel like they have sufficient funds. So you would think that that certainty would be valuable, but it's, again, it's, you know, with the covenant providing the tools for members to kind of work through the various solutions, I think is, is where the purpose of an annuity, and potentially the arguments that would make members pick it up will come retirement.

 

Wouter Klijn  25:45

Is quite a complex space, because there's a lot of different levers to think about. But from an investment perspective, is there a chance that we may be also overthinking this? Because when you transition to retirement, obviously you're going to have an income stream coming out of it. But at the same time, you're probably going to be needed to be invested for still quite a number of years. If you're retired at 60, you probably got another at least 10-15, years where you want to have some exposure, probably through growth assets. That's the time where your balance is the biggest. So you get the most benefits from it as well. And at the same time, I also think some of the conversations that you know you have with members on just the super animation side is is hard enough to explain the differences between the investment options later on, bringing in income streams, annuities, you know, pooled vehicles. Are we maybe just overthinking it? Yeah.

 

Kim Bowater  26:43

I mean, potentially, you know, advisors have always had this kind of, you know, historically, this bucketing sort of approach, where you just have some money in cash, and then you have the longer term in a in something that's more growth oriented. And, you know, there's an intuitiveness to it. From a member standpoint, it doesn't necessarily need to be an incredibly complex solution.

 

Wouter Klijn  27:04

Yeah, I think it was the old equip that used to have this approach where that plan is just, if they had to start from basically from scratch, they would just do a third, a third, a third, third cash, thirdly, fixed income, first growth assets. And that seems to still work pretty well, yeah, yeah. In that sense, maybe it is all too complicated with adding a lot of product.

 

Kim Bowater  27:27

And I think, you know, we have seen, I think, in life cycle or age based default type structures, they used to de risk quite, quite early into retirement. And I think they've recognised the point that you've made, which is, you know, there's still a long period in retirement to go. So you don't necessarily want to de risk, you know, at 60, you want to maintain your growth exposure, because you've potentially got another 20 plus years to go, as long as you can kind of take the, you know, any volatility that comes with that you're you can be better placed over the long term to maintain a, you know, a good, balanced portfolio.

 

Wouter Klijn  28:09

Yeah, and you mentioned earlier, as well the life cycle funds, which is sort of an instrument vehicle, where you could potentially see a stage where you could have this seamless transition, where you don't have to necessarily think about it, because once you get to retirement, it's already de risk. You just have to change sort of the structure that it's helping at the same time it's it's kind of interesting to see that around the time that my super came out in the legislation, a lot more life cycle funds came out as well, which, okay, you need a new default. So that might be a good starting point to think differently about. Are we still on the right track at the same time, these things are very hard to compare with other products. Is there also a bit of a you can hide a lot in a life cycle fund?

 

Kim Bowater  28:55

I think there's probably a range of of rationales for a life cycle product, the super industry certainly become, you know, more peer aware and competitive, and, you know, there's a lot of focus about making sure you're a strongly performing fund. So in some ways, that's that's kind of fed through the industry from a from a regulator perspective, I think funds also, of course, need to judge kind of what's their membership base. So if your main membership, by default, goes into my super you know, what do you do if, say you've got a lower risk, an older, more conservative membership base, on average, compared to, you know, a younger more risk taking potentially membership base in another fund and your those two defaults are being compared against each other. It may make more sense to have a life cycle product that can respond within the default to the different types of of members. It exist and still being kind of comparable, you know, in a, you know, balanced survey type construct. Yeah, I think, you know what I originally when we first did the work on life cycle, what I liked about it was that it had a sense of from, just from the member perspective, that this, you know, age is something you do when your assets are bigger. You know, you don't want to be losing taking on too much risk. You might want to, you know, have more moderate risk, and the fund is managing that for you without you having to think sort of people don't spend a lot of time thinking about their super default option and whether it's fit for purpose. You know, after a decade of when you set it, and I think that's right, because we still see in Super a tendency for for members to increase switching in challenging market environments. And that's often the worst time to switch, because they do it at the bottom. You know, it happens at the bottom of the market after the GFC, a lot of people we didn't see, you know, they didn't switch back for a very long time, so that the risk of not having enough in retirement is really coming to bear there because of switching due to risk concerns. And so if you're in a life cycle product where some of that risk concern is is being abated because you're near a retirement and you're in a bit less risk than you were naturally, I think you know, it can provide a greater sense of, you know, willing to stay with it for members when you get into more tricky environments.

 

Wouter Klijn  31:29

And I think the same is true for sort of the younger cohort, where I think a lot of life cycle funds tend to be a bit more aggressive there. So a lot of growth assets in the early years, which you know if I think if young people make a choice, they tend to go more conservatively, rather than more aggressively. So it's probably good to have that setting up front, that if they don't do anything, they're in a high growth asset. And I think that's recently David spoke about that as well, where, separately, with his work with the actuary Institute, where they're looking at what is the chance of actually making your investment objective? Well, if you're in cash, you're not gonna make and that's a different risk than how volatile is your investment, right? So it also works for the younger cohort. I think there maybe finishing up. We can look a little bit about where frontier is now, obviously away from the early days where everything was super it's a much more diverse business. Now. There's a big insurance business that has been built up. You've been active in the private wealth space. What is, sort of your sense of where the industry is evolving? Because at the same time, we have the consolidation fewer funds, and we've seen also more fluidity, I think, between what was used to be silos. We had the retail funds, we had the industry funds, we had private wealth. But now people tend to move more across. So all of the organisations seem to get more sophisticated. What does it mean for your client base, what is sort of your outlook on where you might grow, and how the first fight it is?

 

Kim Bowater  33:07

So I think, I mean, we've really broadened our business. So we obviously have a heritage in superannuation, and that continues to be quite a large part of our business, including offshore as well. But we've really broadened and as as a business, as a consulting team, into more specialisation of asset owner type. So we have quite a an experienced insurance and liability driven team, mostly of actuaries that really are very in tune with investing for those sorts of requirements and what that that market is, and we have a team that's focused on the smaller asset owner space, be it, you know, universities, that They can be quite sizable, charities, family office, wealth, and I think with that group, which is kind of quite diverse in and of itself, what we're seeing when they've come to us over time is they they've got to a size where they can kind of contemplate an institutional advisor, and they want to really strengthen their arrangements, their governance, their portfolio, make sure It's fit for purpose. And that's kind of where we frontier comes into play. And I think what we're seeing is the growth in in assets enables that so in wealth as well. We're seeing a movement of talent between, you know, super and consulting and wealth, and we're certainly seeing wealth really look to kind of strengthen its own processes and portfolios. And that's that's really important. I think that's really exciting for the investment industry. Fund managers as well in Australia, you know, who have been in the institutional space and in a consolidating supermarket, but now you know, have this. Broader opportunity set as well, and and, you know, wealth platforms that are really looking to kind of make sure they're they're bringing a strong, robust institutional quality to their client base.

 

Wouter Klijn  35:12

Yeah, yeah. So we started off saying, you've been 23 years with Frontier, you've seen a lot of change in the industry. And I remember reading earlier this year for International Women's Day, you you wrote a piece that when you finished your CFA in 2001 there were only two women in the Melbourne chapter for the CFA. I think that has changed a bit. But what is your view at the current state of sort of the gender balance in the investment industry. Are we getting there, or are we still a long way off? I mean,

 

Kim Bowater  35:47

it's certainly a lot better than than then. That was a bit of a surprise, because, you know, in science and, you know, actuarial, actuaries and such, it was much more balanced. And it took me a little while to figure out too, because frontier was always, you know, had leading female investment, people with Fiona, but others like Kerry Williams and Sarah Khan, so we were a bit of an outlier and and often, you know, people mentioned that specifically as having kind of more women, which was great, I think. But yeah, it took me a little while to realise the investment side was, more broadly, was was a bit poor. And I think we're seeing more women, particularly in asset consulting and in asset owners. I think then the fund manager side, it's still, it's got better, but it's off a really low base. And I think there's a range of data we continue to track that. I think the CFA does work on that as well. Lot of male oriented, dominated investment teams. And I just think, you know, diversity of thought and diversity of perspective is really important in investment decision making, and you can't just have and likewise, you know, gender has a role in that, and just to kind of having one woman is not sufficient to to open that diversity gate and for other types of diversity too. So I think there's, there's definitely more to go. I think there's a lot more, you know, senior, experienced women and in the industry that people can look to, and that's really important too, to see what success looks like, and see different ways of being in a senior role. So I think that will feed on itself still. But you know, every organisation should be thinking about about that aspect. It's something we cover in our manager research as well. We think, you know, just continuing to discuss that topics an important way that change occurs.

 

Wouter Klijn  37:42

Yeah, it's interesting to hear you say that you didn't initially realise, because obviously Frontier has that heritage. And I mean having Fiona Trafford Walker there, I think she, you know, is one of the big figures of this industry. Was there a point where you sort of went like, oh, not every organisation has a Fiona. Is there sort of that realisation that you went, Oh, this is actually quite a unique situation. Yeah.

 

Kim Bowater  38:06

No, it was, well, I mean, certainly at the I mean, investment teams when I started at Frontier, were very small. They mostly male, but very small, so it wasn't kind of a fair judgement. But, you know, boards and investment committees were mostly male fund managers. Teams were mostly male. I remember going on a research trip. We're becoming a range of asset classes, but mostly private markets. And, you know, I think we met with around 30 firms, like, so, a lot of different investment people through those meetings. And I got to the end, I thought, Oh, we've met with, like, maybe three, three, you know, maybe not 300 people, maybe over 100 people from investment teams. And I think three were female, right in the whole trip. And I thought that's yeah, it just kind of once, you kind of didn't notice it for a little while, then you're like, Oh no, that's not Yeah, that's just low, that's a low level. So it, it kind of came to to bear from a couple of different, different elements, but I think a lot of work's been done on that. I think organisations see the the merit in, you know, a broader perspective and team and, you know, so we're, we're on a, we're on a positive journey, I think, with it, yeah, yeah, excellent. I don't really know what it is about investments that would make it like this, to be honest, but

 

Wouter Klijn  39:28

Well, I do remember that one of the early podcasts that actually Daniel grioli did for me, he was talking to Denise Selden, fund manager in the US, and she started out with, I think, encore on the stock exchange floor, and that was at a time that women were not allowed to, like, visit the same cafeterias or something. I think there was a sort of form of segregation. So at least we've come a long way since. But yeah, we still got some way to go in other aspects. Yeah. But Kim, thank you very much for your time. It was great talking to you and yes, thank you for coming on the show.

 

Kim Bowater  40:06

Thank you. It's been great.