PZ: Rod, you’ve been with Clime for almost a month now in the role of CEO. What initially attracted you to the role?
RB: Clime has always had a unique, ‘straight talking’ way of engaging with clients.  That approach really resonates with me – the ability to distil complex information and translate it into every-day language that can genuinely help people cut through the noise and make the financial decisions that can improve their lives.  Clime’s values of Integrity, Transparency and Conviction are closely aligned with my personal values, which made the decision to join the group easier.
At a bigger picture level, the structure of the wealth management industry has been changing for some time: now accelerating with the Royal Commission’s findings.  Clime’s background and core strength in investment management places us in good stead to build out our Clime Private Wealth business and identify growth opportunities as companies in the wealth management sector make decisions around where they want to compete going forward.
PZ: Your previous experience in financial services is pretty diverse. Can you share with us something of your professional background?
RB: I’ve had a very diverse career!  Initially I started out in the timber industry (I have a BSc with a major in Forestry).  This was a good grounding in many ways as, with forestry, the decisions you make today have impacts for many years to come – so gathering the information you need to make a decision, planning carefully and executing well are ingrained (excuse the pun).
In the early 2000’s I joined the Commonwealth Bank, moving into the role of Chief Operating Officer and alternative Managing Director of CommSec.  CommSec is an incredible business and I am grateful to have had the opportunity to work in this role, growing the business organically and via mergers and acquisitions including a $373m acquisition of an ASX-listed stockbroker.  Prior to Clime, I spent nearly 6 years as Managing Director and CEO of an integrated wealth management business, growing this rapidly from a small family-owned business to a national wealth advisory, asset management and IT business with 7 offices around the country.
I have also worked in management consulting for an international firm, in a small business with 3 co-founders and in the not-for-profit sector leading a national environmental NGO.  One consistent theme is that I’ve always been intellectually curious, seeking to understand what makes people, businesses and industries ‘tick’ to develop and implement strategies appropriate to clients and markets the business operates in.  I believe my diverse background gives me a unique perspective on businesses large and small.
PZ: Clime has a history of running discrete share portfolios for mostly SMSFs. Now it is expanding its offering to include professional financial advice. Can you explain the strategy, and discuss the benefits for clients of this new business model?
RB: Clime’s investment management team have historically had deep experience in managing Australian equity portfolios for clients.  As we have worked closely with clients over the years, we have learned that more and more, clients need help understanding not just individual investment products, but their wealth in general.  In the past we have not had the capability internally to meet this demand, however with the creation of our Private Wealth offering, we can take more of a partnership approach with our clients across advice, investments and SMSF administration.
PZ: Clime has also been steadily broadening out its product offerings to include its own managed funds (like the Clime Smaller Companies Fund) as well as partnering with external fund managers (like Prime West in the direct property space, and Realm in the mortgage backed securities space). Is this a pattern for the future or are these more in the nature of one-offs?
RB: In terms of the products and services that Clime offers, our heritage is as Australian equity managers.  In response to client feedback, in the last few years we have significantly diversified our offering to include small cap Australian equities, international equities and fixed income.  We also identify and partner with a number of specialist managers in the direct property and income markets.  This approach means we deliver integrated solutions for our clients across multiple asset classes with targeted return objectives: effectively moving from a product-specific to a portfolio investing approach, offering diversification and improved risk management in the process.  We will continue to explore and bring to market other investment opportunities for our clients, developing these in-house where we have capability and competitive advantage, or identifying and sourcing ‘best of breed’ managers where we do not have the internal capability.
PZ: There is obviously a lot going on with the distribution of financial products and services at present, with the banks largely vacating wealth management and the focus on commission-based selling of insurance products at the Royal Commission. Do you see this as opening an opportunity for the smaller, independent players (like Clime) to expand their roles?
RB: Absolutely, the opportunity for Clime is significant.  The Royal Commission has identified a number of areas where the financial services industry needs to improve.  As we build out our Private Wealth business, we must ensure that our culture is appropriate to providing financial advice that is always clients’ best interest.  Importantly, we must also ensure that our teams focus on meeting client needs in a holistic way.  This goes beyond compliance with the law; and is about fairness, providing services that are fit-for-purpose and delivering these services with care and skill.  This encompasses Clime’s ethics and values of Integrity, Transparency and Conviction.
Importantly, I do not see the Royal Commission and its inevitable impact on industry structure as a threat, but as an opportunity.  Many of the large institutions have already made the decision to exit the wealth management sector; and smaller institutions will need to consider how they transition to a new model consistent with higher regulatory and community standards: including how they manage the capital requirements of this transition.
Amid all of this change, clients still need quality financial advice and investment solutions.  At Clime, we are in the unique position of being able to provide both, building lifelong partnerships with our clients based on trust and respect.  We will continue to watch this space closely over the coming months as the Royal Commission process nears its conclusion.
PZ: Do you have a vision of what you’d like to see the Clime business look like in, say, 3 or 5years’ time?
RB:  Clime is quite uniquely positioned with a strong brand and heritage in investment management, supplemented by a nascent private wealth business.  I firmly believe that our future lies in building strong relationships with clients, to be there for them as a partner in life, whatever that may hold.  Over the course of the next 3-5 years, I expect Clime to grow organically and via acquisition with this partnership ethos and our core values as our guiding principles: allowing us to leverage the strengths of our heritage and build lifelong partnerships with clients.
PZ: Rod, ultimately our clients want us to deliver excellent investment returns, and assist them in securing their retirement. How do you see investment markets at present, both here in Australia and overseas?
RB: Thanks Paul, a big question indeed!  Some of the ‘macro’ issues affecting markets include the US Fed raising interest rates on the back of the extraordinary economic stimulus in that country; trade wars the US seems determined to pursue; China’s manufacturing continuing (albeit slower than before); and steadily rising commodity prices.  More recently we are seeing a run-up in major commodities like oil, which is causing some ructions among global markets.  We have had a long bull run on equity markets and if we look at historical market cycles as a proxy, it would seem there is still some way to run with this one.  There is a cautionary note here, however, around valuations, political instability, the potential implications of inflation in the US, and a lower Australian dollar.  Our view is that it remains a good time to be invested – but to stay engaged with Clime via your Clime Private Wealth adviser and our regular investment updates to ensure you’re across what’s taking place and can rest easy with your investment strategy.