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The return of the disruptor

25 June 2020

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Natasa Williams, Partner

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 of our generation. 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.

Deeply embedded in human nature and our survival instinct is the ability to seek the silver lining in challenging times. An activity requiring great focus of mind: finding positive outcomes to form the basis of surviving and thriving in a remodeled future. There are parallels in how we approach our lives and our investment portfolios. An opportunity to reassess, rebalance and rearrange matters to face the new future.

This is not an easy task, as uncertainty is enormous and on many fronts.  Public health, economic growth, employment, supply chains, global trade and global political stability all face uncertainty. 

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 at the forefront?  How to invest to support this activity and ultimately be rewarded as an investor? 

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, with winners and casualties in numerous industries. From healthcare, energy, communications and retail to name a few.  Careful investment selection with a focus on longer-term outcomes has become more important than ever, companies' futures will depend on how they will respond to the acceleration of change that this crisis has caused.  Some developments will undoubtedly surprise us.  Perhaps we expect too much to change? "Stay alert"… we have been warned!

At the same time, investors are engaging with their Wealth Managers in seeking answers to wider questions concerning our future, rearranging portfolios for impact on society and the environment, increasingly without the corresponding drop in expected investment return, or quite the opposite.  Some old style practices have been visibly shunned by the investment community.

This year our industry has an opportunity 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, 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.

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