The chaos of the pandemic offers the industry a chance to develop, writes Nataša Williams
Reference to ‘disruption’ and ‘disruptors’ has become a frequent, almost necessary ingredient of investment proposals. We use it to describe companies that offer groundbreaking innovation, those who challenge the norm, the entrepreneurs.
Yet when Covid-19 and related events disrupted lives, livelihoods and balance sheets, we were reminded of the true meaning of the word. Fast, vicious, painful and hard. One to mark our generation. Embedded in human nature and our survival instinct is the ability to seek the silver lining in challenging times.
There are parallels in how we approach our lives and our investment portfolios: a chance to reassess, rebalance and rearrange matters. How do we focus on the silver lining when looking at personal balance sheets of our clients? Can we imagine and project the world post-pandemic? How to thrive? Which economies, which businesses will emerge? How to invest to support this activity and ultimately be rewarded as an investor?
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This year, investors are focusing on these questions with their advisers and our industry has been busy seeking answers. Some answers seem obvious. We have seen an acceleration of innovation and technological change. Careful investment selection with a focus on longer-term outcomes has become more important than ever, and companies’ futures will depend on how they respond to the acceleration of change.
Some developments will surprise us. Perhaps we expect too much to change? At the same time, investors are engaging with their wealth managers in seeking answers to wider questions, rearranging portfolios for impact on society and the environment, increasingly without the corresponding drop in expected investment return, or quite the opposite.
This year our industry has a chance to show its value. We are aware that our social purpose is allocating and guiding capital to investment opportunities. So not only do we seek to rearrange investment portfolios to take advantage of change, also our decisions and advice are starting to drive change.
Our clients increasingly focus on allocating capital to shape and benefit from the post-pandemic world. How we invest will impact the kind of world and society that will emerge. For us wealth managers, we have an important part to play, and this in itself is a silver lining for the future of our industry.
Nataša Williams is head of LGT Vestra’s private office