"Educating investors and policy makers" – The Economic Journal

"Educating investors and policy makers" - The Economic Journal


The issue is critical at a time when disruptive issues such as demographics and increased life expectancy call into question public responses at the reform level. The manager stressed that the risk / reward binomial translates to the average savers in the fear of losing money and this is a theme that only solves with education for the long term. Lesley Ann Morgan, Global Head of Retirement of the same manager, criticized the option that Brussels weighs and that goes to create a guarantee of capital in the European pension funds.

"That means there will not be a good product" for savers "when you want to minimize the risks of volatility." Nicoll points out that in Brussels the buzz word is about sustainability and that, in reaction to Trump's policy, the tendency to focus on investments in such areas as climate change, "but customers are focused on something different and want to return ". On the other hand, asset managers "will not solve the world's problems, they need customers and regulators to" see the products. " Rupert Rucker, Head of Income at the same manager, conducted an inquiry into the interest of savers and 87% of respondents focused on return. "That is the need and the income is to pay the bills and have incomes for the future," he says.

Rucker is peremptory in saying that "the last two generations had no responsibility for the capital they invested, they felt that it was protected but that scenario was gone. Investors have to take greater responsibility and can diversify into new solutions, but always with their own responsibility. " And he recalled that given a continuous scenario and low interest rates imposed by the ECB and the monetary policy of the EQ, banks do not want deposits and do not need funds. "

Lesley Morgan recalled the growth of capital applications outside the financial system and a more complex capital market and scenario where the savers have to learn to withstand volatility. Rucker also recalled a new time in which banks charge commissions to keep deposits and equity stakes with a minimum of tenure, says the manager, which can not be less than five years. And it should be noted, he says, that "when the investor sells, the risk is crystallized." Nicoll spoke of a structural change when thinking about investment and reform because what we need to learn is not only the term volatility, but also the effect on the "life cycle" and only in this way is it possible to enter into new themes such as climate change and look within the companies for the opportunities.

Andrew Oxlade, Head of Editorial Content at Schroders, said that avoiding the rise in the average temperature of the planet by two degrees Celsius and thus avoiding a catastrophic impact on the world economy means cutting 60% of emissions of CO2 in the next 30 to 35 years. And he recalls that in the first analysis, about 5% of global companies will benefit from climate change and 90% will be in a critical situation. "Managers will have to realize the value of companies and the implications of the various options on investments," he concluded.

* the journalist traveled at the invitation of Schroders



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