Speaker 1 00:00
We believe that investors should know what they're paying, what they're buying, what their performance is. They should demand transparency, and they're the sorts of things that that we were pushing from the start. Many Australians don't understand basic financial concepts around what is an ETF, what does diversification mean, what is inflation, asset allocation-these terms that sometimes we take for granted, people know, but in actual fact, they don't1. of the things that we-and I think all organizations do it, to be honest, Lara-and we focus on it is building trust. And it's not about building trust when things get shaky; it's about doing it all the time, so that when things do get volatile, you've got that trust already.
Speaker 2 00:49
What does it take to change the way an entire country thinks about money? For 30 years, Vanguard Australia has helped reshape investing in Australia, lowering costs, increasing transparency, and bringing long-term investing into the mainstream. But behind that evolution is a much bigger conversation about trust, discipline, leadership, and how businesses stay focused on long-term outcomes in a world obsessed with short-term noise. I'm Lara Nacesian, and this is CEO behind the scenes. Today, I'm joined by Vanguard Managing Director of Asia Pacific, Daniel Shrimpski. From leading through market volatility to helping everyday Australians become confident investors, Daniel is at the center of one of the biggest shifts in modern finance: the move from saving to investing and from complexity to simplicity. Please enjoy, Daniel. Welcome to the show.
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Speaker 1 01:54
Thanks for having me, Lara.
Speaker 2 01:55
Thanks so much for being here, Daniel. I know that Vanguard is celebrating 30 years in Australia. When you look back at the investment landscape of the mid 1990s what was fundamentally missing for Australians back then?
Speaker 1 02:15
Yeah. Well, thank you again. Thanks so much for having me. I mean, you know, we're wrapped to celebrate 30 years in Australia. First of all, it's the business has changed a lot over that time. But to your point, I I think the investing landscape has changed dramatically. You go back to the mid 1990s and the cost of investing was so much greater than it is today. And investing was really something for wealthy Australians or wealthy people around the world, and people paid upfront fees. They paid exit fees. They probably paid anywhere from 100 to 300 basis point management fees, and it was something for the wealthy investor. And I also look at the way in which people accessed investing. It was through a stockbroker. Generally, online brokerage platforms didn't exist. They really came in into the fore more like the sort of 2000 year, certainly in Australia. So the way people accessed investing was very different, and they they probably had a very heavy focus on Australian investments, and the access to international investments didn't exist like it exists today, and then you think of things like superannuation. Superannuation came in in Australia in I think it was the early 1990s 1992 maybe, and people were contributing 3% Well, now they're contributing 12% and just the way in which superannuation has become a part of people's wealth and a part of their overall plan is so much greater, but just the transparency and choice in superannuation didn't exist back in the early 1990s So things have changed a lot, and of course, as a business, we've had to change with it.
Speaker 2 03:53
Absolutely, there's been so much significant change that's happened in that period, and Vanguard, as you touched on it, entered the market with a very different philosophy around costs, transparency, investor outcomes. Why was that approach so disruptive at the time?
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Speaker 1 04:13
Yeah, well, I think you know when people are paying such high fees, us coming in with an investment philosophy that was more around passive investing that was very different. Index investing, where we're saying, "Hey, don't don't pick individual stocks, buy the market. As long as you're buying the market and you're doing so cheaply, you're going to get a great result. You're going to get the market result if you do it at a good cost. And from a transparency perspective, I mean, we we believe that investors should know what they're paying, what they're buying, what their performance is, how that works against a benchmark. They should demand transparency, and they're the sorts of things that that we were pushing from the start. The way in which. We've done that in terms of the way in which we approach the market has changed, but our philosophy around low cost investing, transparency, diversification, manage risk through diversification-they're the sorts of things that we have promoted from 50 years ago when Vanguard was founded. Bringing them to Australia, we think, has made a meaningful difference in terms of the investment landscape here,
Speaker 2 05:22
absolutely. And over these past three decades, how have you seen Australian investors evolve in the way that they think about long-term wealth creation and and long-term success?
Speaker 1 05:37
Yeah, I mean that's a great question. I, you know, I think back to you know 30 years ago, or you know decades ago, it was about saving. It was about saving your money. It was about paying down debt, and I think that has evolved dramatically. To now, I think the financial literacy in Australia has improved. We still have a long, long way to go. I think that's a real barrier, but it has improved, and people have invested in ETFs. They've found out what an ETF is, and that it's a vehicle that can give more Australians exposure to investing. Superannuation, again, you think of superannuation. It has become for many Australians the number one asset they have. For some Australians, the second largest behind the family home. But for many Australians, it's their largest asset. You think of property; it's such a huge part of Australians' wealth. So things have evolved from the time when people were, "Where do I put my money? Where do I save it? To okay, how can I benefit from the value of compounding through ETFs, through superannuation, and then of course property is you know a real wealth engine in this country as we know. So things have evolved dramatically.
Speaker 2 06:54
And aside from financial literacy and education that you touched on, what do you believe are some of the other barriers that have prevented Australians from being bold, perhaps, and willing enough to actually make these investment decisions?
S S S S
Speaker 1 07:13
Yeah, I mean, it's one that we we think a lot about because you know the way Lara we we think too much of Australians' financial assets are held in cash, and we can talk a little bit about that. But you know, we we sort of talk a lot about what are those things that are preventing more Australians from entering the capital markets and from investing. And if you look at capital markets, the you know the S and p5 100 has delivered 15% per annum over the last 10 years, the ASX 300 is probably more like 10% approximately. So, Australians that have been invested have done extremely well over the past 10 years and beyond. And the things you know, financial literacy. I know I touch. I touched on it, but it is a real problem here. Of course, I think it is improving, but it is still a challenge. And Australians, you know, the research we've done, and we continuously do research, don't understand. Many Australians don't understand basic financial concepts around what is an ETF, what does diversification mean, what is inflation, asset allocation. These terms that sometimes we take for granted, people know, but in actual fact, they don't. So we look at you know six out of 10 Australians don't know the age in which they can access their superannuation, and if Australians don't have that financial literacy, if they don't understand, the danger is that they lean out and they don't invest because they they don't know what to buy. So that is a barrier. You know, we look at again. Australians don't know how much they actually need to invest. I think the research shows that many Australians think they need 1000s of dollars to invest. Well, in actual fact, they need a few $100 It's probably the number we would say they need to invest. So, just starting out, Australians can start with a small amount, but they're unaware of that. And the other thing I would say: advice and guidance. Australians having not not all Australians need a full service financial advisor, a little bit of guidance, a little bit of direction, coaching can go a long way. And we think in Australia that it's inaccessible today. It's cost prohibitive, and the regulation does make it a little difficult for us to give guidance or personalized guidance to Australians. So that's a barrier. And maybe the last thing is just cost of living pressures. I mean, at the end of the day, real wages in Australia have reduced over the past five years or so, and that's putting pressure on Australians. And they've probably got more disposable income upon which they can invest. So there are all these things that you know we would call barriers. Probably the number one would. Would say is just that education or that financial literacy that we think with an
improvement in it, and we think that's both industry and government's role to help improve financial literacy. But we think it can go a long way to helping Australians benefit from capital markets.
Speaker 2 10:15
Absolutely, and I'm curious to know from your perspective and from what you've seen as well, whether you believe that there's a distinction between safety and comfortability when it comes to investing. I think what you touched on earlier is really key. That a lot of Australians tend to hold a lot of money in their bank accounts because of the perceived safety that comes with that, and there is sometimes an element of comfortability around investing. Yeah, it's something new. It's something different. Obviously, the education piece helps tremendously. But is that something that you've also seen as a potential barrier, or not so much? I mean,
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Speaker 1 10:58
it's interesting. I think there's certainly something in that, Lara. You know, we have seen
significant amount of younger investors enter the capital markets via the ETF vehicle,
predominantly over the past five years or so. And I think it is great to see new Australians dip
their toes in the in the in the world of capital markets, and get exposure and learn along the
way and try it out. But I do think, again, you know, the things that we continue to promote, I
think, should give Australians that comfort or that safety. Where spread your risk,
diversification, spread your risk. It's it's you know buying one stock versus buying an ETF. Not
to say one's better than the other, but an ETF is a diversified investment. You know, again, you
can go and buy you know the ASX 300 via an ETF, where you're essentially buying 300
individual stocks through one ETF product. That's diversification. If you're going to do it, do it at a low cost. Again, that should give Australians some comfort, and then long-term investing again over the long term. And I'm going to sound like a broken record, but markets have performed well over the long term. And again, it's our job to educate Australians that holding their nerve when things do get a little shaky, markets sometimes do get volatile, and holding your nerve is really important through those times. And thinking about that long term and setting yourself up for long term success is is what we we would promote, rather than sort of getting jittery and getting nervous when things do do get a little um volatile.
Speaker 2 12:39
Yeah.
Speaker 1 12:39
So I think you can have both. You can have safety, but you can also be in the markets if you do it the right way. We believe.
Speaker 2 12:44
Yeah, it's a great perspective. Thank you for sharing that. And one of the strongest messages that Vanguard promotes is that behavior matters more than market timing. Oh
Speaker 1 12:55
yeah.
S S S S S
Speaker 2 12:55
Why is investing psychology often the hardest part.
Speaker 1 13:01
Yeah, this is an interesting one because it is so hard, Lara, to predict what markets are going to do. Again, the experts struggle; people that get paid struggle. I mean, the the data suggests that, and there are so many factors that go into how markets perform day in, day out, week in, week out, year in, year out, and you know we would say again, invest, display behavior or exercise behavior that is around long term investing. A little bit to my point earlier, we encourage Australians to just ride the wave, and when things do get shaky. Focus on the long term because, again, markets will perform 15% in the S and p5 100 over the past 10 years, 10% ASX 300 And when you sell out, if you can't sort of display that behavior, if you do focus on timing and you sell out, you've actually got to get it right twice. You've got to know when to sell out, but you've also got to know when to buy in, and the likelihood of getting that right is very, very difficult. And therefore, you know, we would say the psychology, the behavior of staying the course, is way more important than trying to get the timing right. Because, again, professionals who get paid for it, struggle with that timing, and you know, therefore, that's something that we preach a lot, and we will continue to.
Speaker 2 14:26
And I want to add on that point as well, because so much financial commentary focuses on that timing of the market, getting the timing right. But you believe in something different, which is that consistency, that discipline, that long-term vision matters more. So, for someone who is perhaps a little bit apprehensive around kind of getting their foot in to investing, what would you say to them in terms of perhaps cultivating that consistency or that discipline required to be? Able to succeed for the long term. One
S S S
Speaker 1 15:02
of the things that we and I think all organizations do it, to be honest, Lara, and we focus on it is building trust. And it's not about building trust when things get shaky. It's about doing it all the time, so that when things do get volatile, you've got that trust already. So I think you know it's something we focus all the time on building trust. It's not something we take for granted. It's something that we are always trying to make sure we retain. We know we can lose it quickly. So it's the most important thing I think in my job, and and it's the it's the thing that that we you know it's probably the number one asset we have in terms of the trust we have with investors. So again, I think if you focus on trust through the journey, and if you continue to educate, you continue to communicate, you continue to try to bring investors along the curve in terms of their journey. I think hopefully they start to trust us, and you know we have significant amount of experience and expertise in the most humble way possible, and I think with that trust you can help give people that confidence and make them feel more confident about that and comfortable, I should say, around their investment journey. And everyone's journey is different. Everyone's trying to get different things out of their investment journey, but at the end of the day, we'll continue to preach those things that we believe in, and that is, you know, that long term strategy will serve people well in terms of building for you know a successful retirement if that's what they're after. So yeah, trust I think is such an important one.
Speaker 2 16:37
It really is, and and to your point as well, trust is something that can take a long time to build. Yeah, you know, Vanguard, as we we touched on earlier, has been in Australia now for 30 years, and it can be disrupted very quickly as well. You know, trust can be broken very quickly. So I think that long term view and long term vision is commendable in a world where we're constantly seeking short-term validation, short-term success, short-term outcomes. So, how would you speak to? Again, I know we've touched on this, but I think it's a really important point around being willing to sustain something for the long term and how that can continue to pay dividends. Yeah. long beyond just am I winning this season? Yeah, yeah. How could you? How would you speak to to that piece
S S
Speaker 1 17:32
as an organization? I think we are a little different. It might help just to share a little bit more. We are we are not a publicly listed company. You know, Vanguard manages in U.S. dollars about $11 trillion That's I think 17 trillion Australian, but we are we are essentially owned by our investors. So it's the funds, the Vanguard funds that own Vanguard. So therefore, it's the investors in those funds that essentially own Vanguard. So everything we do organisationally is in the interests of the investor. When we're making decisions, when we are trying to guide investors through their journey, when we're interacting with them, everything we do comes from a place where we're putting the investor at the center, that makes my job really easy because when it comes to trade-offs, when it comes to making decisions on strategy within our business, I can put the investor at the center of everything we do, and if it's in the best interest of the investor long term, great. So I just think with that backdrop, it helps when we're trying to educate, when we're trying to communicate with, when we're trying to put our ourselves in the shoes of the investor and helping them go along for their journey into investing. And you know we're dealing with Australians and worldwide investors that have millions with us, and others that have you know maybe you know a few $100 to a few $1,000 with us, and everyone's story is different. But again, that long term view, which aligns with the way in which we run our organization and putting ourselves in the shoes of the investor, I think takes away the conflict and the trade offs sometimes.
Speaker 2 19:17
Absolutely, you've led through periods of market volatility, geopolitical uncertainty, and rapid industry change. What does leadership look like when people are looking for stability and reassurance?
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Speaker 1 19:37
And I think it's probably whether it's employees or whether it's clients again, I would go back to to trust and putting trust at at the center because we need our clients to trust us through volatility through those those tough times. I I think again, and and I don't want to sort of sound too repetitive, but. From a leadership perspective, making sure we're communicating those things that we believe in, and making sure that we're being consistent with those things that we believe in-low cost diversification, long-term investing-and then trying to make sure people understand that investing's you are going to have bumps in the road, you are going to have periods of instability, and that investors are best served riding those waves. And we've seen, Lara, honestly, we've seen many instances where people have got out at the wrong time. And again, getting out at the wrong time and then trying to get back in at the right time is really, really difficult. So, as a leader, you know, trying to make sure that we're communicating and educating our investor base in a way that helps them, but also trying to keep staff calm, making sure that that staff understand the importance of sharing those behaviors with the end investor. And you know, you think of what we've been through over the past decade. We've been through the pandemic. We've been through trade wars, we've been through Middle East wars, and through all of those periods of volatility, markets have behaved the way they have. We've still found ourselves in a position where we are up, as I said, 15% and 10% over the past 10 years, despite those things. So, you know, keeping keeping people calm, whether it be investors, whether it be staff, is is certainly a huge part of my job and something you know we we focus on a lot. And it's those times where I think you've got to sort of play leader.
Speaker 2 21:31
Yeah, absolutely. And we've spoken about this from a market perspective and from an investment perspective, but I'm curious if you could touch on it more from a leadership lens, how you have learned to balance short-term pressure of making certain decisions when you know what the long-term payoff is going to be, but whether it's employees, whether it's investors, may not share that sentiment. How have you been able to lead in that regard?
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Speaker 1 22:06
Yeah, look, I I think it's it's Vanguard's as I explained the model earlier. We don't we don't have to report to Wall Street. Ultimately, we're doing what's best every day for the investor over the long term. And I can give you, I think, a really interesting example, Lara, where we've done this in practice. It's probably one of the most pivotal moments in my leadership experience. Where probably about seven years ago, we decided to move away from our institutional business. We essentially in Australia handed back about $100 billion of business to institutional investors, where we were managing money on behalf of superannuation funds, they would come to Vanguard and they would say, "We want you to manage this Australian equities mandate or international equities mandate, and we would manage that and we would get paid for doing that. But to be honest, we thought that we were able to do what Vanguard does best when we go direct to the investor, and we didn't believe that Australians were getting the best shake, and we thought, hey, we're going to go at it alone. We're going to take a long term view, and we're going to hand back that 100 billion dollars and forego the revenue that we get back, get on that 100 billion dollars, and we're going to build our own superannuation fund, which took many years, and we launched that about three years ago. It probably took about four years to build. We launched it three years ago, and now we go direct to Australians with our own superannuation fund. And ultimately, they're much bigger, but we're competing against those superannuation funds that we were managing money for. So, again, I just think it's a bold decision that we made as an organization. I think that's leadership of many people that said, "Hey, organisationally, we're going to take some short-term pain. We are going to build for the future. We're going to build a superannuation funds that is best for Australians. We're going to do it low cost. We're going to do it simple. We're going to do it transparent, and we're going to take the best of Vanguard to Australians. And three years on, we've made a fabulous start. We won't measure success based on three years, but again, I think we are on the glide path. But no, that was a huge decision and one that I think again demonstrates our willingness as an organization, but also as a as a group of leaders to to sort of trade off the short term for the long term. and And I think with that is tremendous amount of communication, tremendous amount of education, both internally and externally. Ultimately, that was a big decision for many. And our whole organization changed, not only the business that we were in, but also the people that we needed to have within our organization. We all of a sudden needed to have people that understood how to go direct to Australians rather than going through. Institutions, people that knew how to build a brand, people that knew how to build a great digital client experience, their different skills and expertise that we needed to bring into the organization. So it wasn't just a change in our portfolio, but it was a real change in the makeup of our business.
Speaker 2 25:18
It takes a lot of conviction to make such a significant change to an organization and how things have been done from a traditional legacy perspective. How did you know at the time that that was going to be the right move?
S S
Speaker 1 25:34
Yeah, we planned this out extensively. Obviously, all the analysis and and what have you that you can imagine? We understood the market well. We've been in superannuation for since 1996 when we came to Australia, but we were managing money on behalf of other superannuation funds. So we understand the industry well, and we also learnt from what we we'd seen in other markets. You know, we Vanguard being a large global organization, we're dealing in retirement systems around the world, and the ability to learn from others was also extremely important. But when we launch a superannuation fund in Australia, we are bringing the best of Vanguard globally into Australia, so we're not doing it in isolation here. But you can imagine the the extent of the work we needed to do to build that. But but again, we can take a long term view, and I think that's one of the advantages that we have in terms of not only are we trying to promote a long term mindset for our investors, but organisationally we're also able to take a a long term view in terms of the decisions we make. So again, time will tell, but we had conviction, obviously. Hence, we did what we did, and and you know, we look back three years into it, we feel really good about that decision.
Speaker 2 26:49
And was there a moment, and it could have been in relation to the change in superannuation, or perhaps it was a different time in your career where you realize that having that long-term conviction and that long-term vision, if you will, would require making some commercially difficult decisions in the short term. Where where did you first learn that that could be a leadership approach or strategy that you would need to undertake.
Speaker 1 27:23
I've looked at different organizations, many different to to Vanguard, and I think the approach might have been different at at other organizations. But again, understanding the business that we are and understanding that Vanguard does its best work when it deals directly with Australians or whoever the investors are around the world, that was very very appealing to us as well in terms of having that direct contact with the investor. But again, I don't think there was any particular moment, Lara. I think it was more about just understanding the opportunity we had and that we could do better for Australians than than I think what the industry had, and I think there was a spot there for Vanguard to come in as a disruptor, and to, I think, put the investor at the center of what we're doing. And I just think it it it wasn't obvious, but it was certainly something that through the analysis, through the work, it became obvious that it was a fantastic opportunity.
Speaker 2 28:25
I'm curious to know as well: has your definition of success as a leader evolved and changed over time?
S S S S
Speaker 1 28:34
If I think back to my journey, like at the start, it's probably more about how do you have the answers, how do you be decisive? How do you be the go-to person that is able to answer the questions? And then I think you move. Success is more about probably enabling others and asking the right questions and building trust with people and credibility. But you're you're leading through others, and I know that point in time where that happened, and then I think you move to the third sort of piece as you grow as a leader from a success standpoint. It's probably being more a steward, and your it's about making sure you've got the right people in the right seats. Success. It's about creating an environment where all the people that work in the organization can thrive. It's about making decisions that are tough, and I think it's about being inspiring. And I think that is what success is more about. So it's, you know, I sort of think it on my journey, you know, three stages: having all the answers, then being the enabler, and then maybe being more a steward and trying to make sure you know 30 years in in Australia Vanguard. How do we set ourselves up for the next 30 years and make sure that we're stronger, that we're better, we've got the right people, we've got the right environment. So that that's the way I think about
Speaker 2 29:57
it. Yeah, that's a great perspective. Thank you for sharing. I want to talk a little bit about the future of investing because investor expectations are changing rapidly around simplicity, transparency, and digital experiences. It's something we touched on a little bit earlier. How is that reshaping the industry?
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Speaker 1 30:18
I think Australians and worldwide investors want. I think they want product that is easy to understand, and if they don't understand what they're investing in, they're probably going to do nothing, and that's dangerous because if they're going to do nothing, maybe they're holding money in cash, and cash is an unproductive asset. So we've got to make sure, as an organization, that if we put 40 ETFs up there, or 50 ETFs, or however many ETFs, that they are easy to understand, and Australians understand why this one versus that one might be right for them. So I think Australians should demand that simplicity. I think the other thing is, as you say, transparency. What are they actually buying? What are they paying? What is the performance? They're the sorts of things that we're starting to see Australians want to understand more. And again, I'll say the same thing: they should demand that transparency. You know, if you're going to invest a sum of money that you've earned very hard for you should know those things. You should know what you're paying in fees, and you know we do think that there is a real opportunity, particularly in superannuation, for greater transparency to exist. And then the last thing you asked about, I think, was the digital experience. And you know, as we think about the digital experience that we put out there for our investors or prospective investors, you know, we're not trying to look at other superannuation funds or financial service organizations. We're trying to look at the best out there, and because I think that's what ultimately consumers or investors are demanding that Vanguard can create that frictionless, mobile-first experience that hopefully over time is more and more personalized. You know, we're not looking at other financial services firms. We're looking at the best in the business, and not to say we're there. We've got a ways to go, but that's what we're trying to benchmark ourselves against. And I think that's what investors and Australians and worldwide investors are demanding.
Speaker 2 32:18
It's that continuous refinement and evolution of the the customer experience
Speaker 1 32:24
for sure. Yeah, I mean, as you say, it's it's yeah, nothing standing still.
Speaker 2 32:28
No, not at all. And ETFs and passive investing have gone from niche to mainstream. What broader shifts are changing in the financial landscape?
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Speaker 1 32:40
Yeah, I mean, I I think yeah, as you say, ETFs has just been a massive, massive change, and and we're seeing in Australia the same curve as we've seen in the US and in Canada in terms of the take up, and and just just to touch on ETFs for a moment because I think it is such an amazing vehicle, probably one of the most innovative investment vehicles we've we've seen, or investment changes we've seen over the past several decades, you can go and buy an Australian equities ETF. You can spend $10,000 and pay $7 management fee, and you can get access to 300 securities. And there are many many examples, but ETFs have really changed the way Australians can access investing. I think the other things we're seeing, you know, advice and guidance is becoming so important for Australians and for worldwide investors. If you think about the aging population, more Australians need access to advice, but it is problematic because they can't, it's cost prohibitive, and there just aren't enough financial advisors out there. But even if you don't need full service financial advice, just what I what we would call small a advice, guidance, nudges, those kinds of things, the regulation is still problematic in terms of enabling Australians to access or to get some of that guidance. So I think advice and guidance is a really big one. the the other The other thing we see, Lara, is there is a huge, I would say, engagement shortfall in superannuation. Where superannuation, to my point earlier, for some Australians, it's their largest, the largest asset they have. For other Australians, it might be the second largest after the family home. But because Australians can't access superannuation until they're 60, it's one of those things that I think Australians look at it and think, "I'll worry about it when I'm 50 or when I'm 60, and I won't, I won't sort of think about it. It's something that's done to me through my employment, as opposed to it being an investment in one's success in retirement. So, I think you know we see that as a challenge, and then maybe the last thing we see, and we see it probably through ETFs, is this move from savers to investors. That's. Another really strong theme we see, where, as I said, 23% of Australians' financial assets are in cash. You know, again, I think it's our job getting more people into capital markets, getting more people to understand the benefits of investing, and that it will help set themselves up for future success. That is really important, and we're starting to see that shift from savers to investors. But again, I think we've got a ways to go.
Speaker 2 35:26
There's such valid points, and and one of the points that I really want to underscore is around superannuation. There still is such a major disconnect for Australians not proactively thinking about superannuation, aside from it being so far into the future, or or so we think, what other factors do you think contribute towards not taking a more proactive approach when it comes to super?
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Speaker 1 35:55
Yeah, I mean, I think it's I think it's so important. It's something it's something we talk a lot about, think a lot about. We've since, as I said, we've been in superannuation for some time, but having our own superannuation fund, it's become more and more evident that that engagement gap. And again, I think it does come a little bit down to that financial literacy, and it does come down to people understanding the importance of knowing where your superannuation is, knowing what fees you're getting charged, knowing if you're in the right fund-not to say one fund's better than another-but individuals should know what fund might be right for them. And I think people taking ownership of their superannuation, and you know we talk about retirement planning. It's very very hard to plan for your retirement if you're not engaged in your superannuation. So again, if you plan for your retirement, you are much more likely to have a successful retirement than if you don't. So again, we we would just you know we consistently encourage Australians to engage in superannuation, engage in retirement planning, and just understand some of those fundamentals. Have a look at your annual superannuation statement. Many, many Australians don't. Just taking 1520, minutes to look at it. Pick up the phone, engage with your superannuation fund, and ask some of those questions that that that might help you understand a little bit more about where your your hard hard earned money is going. So so they're the sorts of things that we talk to Australians about, and I think they can make a meaningful difference in setting people up for that retirement success.
Speaker 2 37:36
Absolutely, and you've advocated for tax incentivised investing solutions for younger Australians, why is helping younger generations so early on so important?
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Speaker 1 37:50
Yeah, look, this is Lara. This is a something that that we have again one of the benefits of being a global organization. We can look at other jurisdictions and see what's working, and you know we look at the ISA in the UK, and there's the NISA in Japan, and they are ultimately tax incentivized investment schemes. And we think a similar type of scheme would be hugely beneficial in Australia, where outside of superannuation, there'd be a tax incentivised investment account that would benefit younger Australians. So, again, I think we have the best superannuation or retirement system in the world in superannuation, but that is for retirement. What about for those Australians that are trying to save for a deposit in a home, or save for education, or save for something else that's important to them, this sort of scheme up to a certain dollar amount would help Australians get ahead. Again, there'd need to be the appropriate governance on it. You know what you would be able to invest in, how much you'd be able to contribute. We've got certain parameters that we think make sense there, but it would be just, I think, a huge benefit to younger Australians, and just give them that head start to help them save. As I said, for things like a deposit on a home, which we know is really, really hard for for younger Australians today, and they don't get excited about superannuation when it's something they can't touch till they're 60. But also give them something outside of superannuation. You know, we think it makes a lot of sense. And and if you look around the world, Lara, in programs like the ISA, it's those middle and low income households that have utilized such a scheme. And that's where I think we need the help in Australia. So we are advocating for that, we are working with government. We are working with policymakers in terms of the merits of such a program.
Speaker 2 39:46
That sounds fantastic. I'm curious to know what role do you see technology and AI playing in the future of investing, and from a client engagement perspective.
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Speaker 1 40:00
Yeah, I mean, I think huge. Again, I would just say technology already playing a huge role of I think of automation around many different parts of our process. It's, I think, from an industry standpoint, it's enabled costs to be brought right right down. It's enabled greater access because so much of the process is automated now. Going back, you asked me at the start 30 years ago what investing looked like. It looked like a bunch of different bunch of paperwork. Now paper that paperwork doesn't exist like it did. Other than for a few, I would say less common transactions, things are automated and and people can do what they need to do on their mobile. If you look at 24/7 access to through the mobile app and being able to get on the platform, being able to talk to AI assistants about some of the basic needs that you have, and hopefully them being able to be solved in the moment. I mean that is huge accessibility improvement. And then personalization. I again, I just think we've move, we're moving, and we're going to rapidly move from a sort of one size fits all to a more personalized experience. Whether it be personalized education, whether it be personalized advice and guidance, I think investing is becoming and will continue to become much, much more connected, intuitive dashboards, conversational AI assistants, people-you know-AI assistance being to help, being able to help with trends and things that they're seeing in terms of your spending behavior, helping with goal tracking. So I just think, again, we've just touched the surface. Obviously, I obviously a huge, huge change going on across all industries, but in terms of investing, I think there is a long, long way to go, and we're just starting to see the early signs of of some of it.
Speaker 2 41:48
Yeah, absolutely. And with everything that we've spoken about today, from long term investing through to leadership in uncertain times, what do you hope some of the key messages, or maybe even one key message that you would love our listeners to walk away with.
Speaker 1 42:07
Yeah, look, I I think it would be we've been in business 30 years here in Australia, as we've discussed, Lara, and and the business has changed so much over the 30 years. I touched on a few of those points. Again, I sort of think of my job as how do how do we set the business up for the next 30 years? And for me, the message is, and all businesses are structured differently. But how do you? And again, as I think about the next 30 years, I think about those short term to long term trade offs and making sure that we're making the right decisions today, that set ourselves up for the next 30 years, even if that is a little bit of short-term pain in our business, we can do that. So, I do think it can't always be about the long term, but again, I see my job and the job of many other sort of heads of business to to help set us up for sustainable success, and and that's what I'm focused on, and that's what my mandate is. And if that means trading off a little bit in the short term, we'll do that.
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Speaker 2 43:10
Well said, Daniel. Here at CEO behind the scenes, we do have a closing tradition. We love to wrap up all of our interviews with the same two final questions. So, question one is: What's one thing you've changed your mind about recently, and why?
Speaker 1 43:28
Maybe not as much recently. I actually think it's from a leadership standpoint that it's okay to change your mind. Is you know, I think back to when I started my leadership journey. It was having the right answers, and it was almost a sign of weakness if you changed your mind. But again, I've got an unbelievably great team. I've got a lot of experts. I think now with additional perspective, additional information, the voice of people who I trust and think so highly of, I often find myself changing my mind on things and trying to source all of the best information and perspective that I can. And I think going back earlier in my journey, maybe that wasn't as common. So that's probably been something I've changed my mind on.
Speaker 2 44:18
I love that perspective, and I'm going to ask a follow-up question to that, which is: Was there a defining moment where you realized you could give yourself permission to change your mind, or was it something that developed over? I think
Speaker 1 44:31
it developed over time, and I think particularly in the role I've been in now, I've been in the role for four and a half years, and I just, you know, some great people sitting around the table who who I trust so greatly. I think, yeah, I having the best information and the best best perspective is just leading to the best decisions, and I'm very comfortable and at ease with that. And I think that's just more part of the leadership journey, to be honest, Lara.
Speaker 2 44:58
Absolutely. And question two: What's one thing that you've not changed your mind about? A belief that you'd want to share to help others lead or live better?
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Speaker 1 45:10
Look, for me, I think that one's easy because I think it again it comes back to organisationally. I've been working at Vanguard for 15 years, and the model hasn't changed in 15 years, and putting the client at the center of everything we do, despite all the noise that exists, change in markets, change in technology, change in competitors, change in all these different things. The one thing that has not changed, and is the fact that we will always put the the client at the center of what we do. And for me, therefore, it makes my job so much easier because as we make decisions, that's what I need to worry about. So I don't have this conflict of client versus shareholders versus customers. There, it's all the same thing. It's just the investor. I haven't changed my mind on that, and as long as I'm at Vanguard, and hopefully that's for some time. It won't be changing anytime soon.
Speaker 2 46:02
Yeah. Well said, Daniel. I've so enjoyed this conversation with you. Thank you so much. And and what really stands out is this idea that successful investing and successful leadership often comes back to discipline, simplicity, and keeping people at the center of every decision. So, congratulations on 30 years, and thank you so much for joining me for this conversation.
Speaker 1 46:29
Thanks, Lara. Really enjoyed it myself. If
Speaker 2 46:31
you enjoyed this episode, please be sure to subscribe, rate, and share it with someone interested in leadership, investing, or building businesses that stand the test of time. Thank you so much for joining us, and we'll see you next time on CEO Behind the Scenes.