Home / Ramifications of the relentless pursuit of clicks

By Greg Bright

Exclusive stories about people losing their jobs dominated our readers’ selection of most-widely read news items during 2016. Unfortunately, job losses in the funds management industry are likely to remain a feature of the changing landscape in the coming year, and probably more.  This is our year in clicks.

It’s a combination of “the ramifications of the relentless focus on costs and fees”, which was the fifth top story of the year as measured by clicks, and changing investor behaviours, such as the trend to various smart-beta strategies, the regulatory move to mandate “low cost” MySuper products and the encroachment of technological advancements in the investment process itself.

Our annual analysis – in this, the final, edition of Investor Strategy News for 2016 – shows us the types of things funds management professionals and super industry participants, who make up the bulk of the readers, want mostly to read about. (The links to our top 10 are published at the foot of this report.)

However, we try not to be driven solely by clicks, which we think is a poor metric to measure the success or failure of an industry publication. We agree with Ross Gittins, the famous Sydney Morning Herald economics editor, who says in his autobiography published this year, that the big media groups should develop their own metrics that better measure the influence and reach of their editorial.

Measuring clicks and page impressions is rough, ready and easy and not necessarily reflective of a publication’s readership numbers or patterns. It’s something assessed by advertising agents who usually do not have much knowledge of funds management or any other specific industries.

Gittins provides this example: two readers go to SMH.com.au. One aims to read the latest column by Peter Fitzsimons, the popular sports commentator, and the other the latest column by Ross Gittins. On the home page they are both waylaid by a sensational little story about a celebrity, say, Kim Kardashian. They digress for 10-or-so seconds on that story and then return to their main aim, spending several minutes reading their favourite columnists. The score as measured by advertising agencies is: Kim Kardashian 2, Fitzsimons 1 and Gittins 1. Why aren’t there’s more stories on Kim Kardashian, the agencies will ask?

Anyway, for the benefit of advertising agencies as well as our readers, here are our most clicked-on stories for the year. Job losses are increasingly a worry, especially for older people in the industry who may struggle to get a new job in a similar position elsewhere. From a news perspective, this targets the strongest reader emotion: fear. Bad news is good news.

• The top story for the year was the spill of senior positions at the big NSW Government fund T-Corp. The Government has merged the underlying investment functions of three of its funds under the T-Corp umbrella, making for a $70 billion portfolio.

David Deverall, who was appointed this year to the chief executive role after the retirement of Stephen Knight, has instituted a major restructure and review of all operations, resulting in, inevitably, some losers along with new winners.

• In a related matter, the second-most popular story was the appointment of Mercer Sentinel to advise on the selection of a single custodian for T-Corp.
• This led to the third-most popular story, another exclusive, which we published early this month. The winner of that tender was J.P. Morgan. The losers were the other five custodians which were considered. The runner-up, for which there is no prize, was BNP Paribas.
• The fourth and 11^th most-popular stories concerned REST Super, the big industry fund. The 11^th story was a news item to do with the departure after less than six months of the REST general manager investments, Ronan Walsh. The other REST story was an analysis, including an interview with REST chair Ken Marshman and chief executive Damian Hill, which included questions about the fund’s structure of handling investments and its relationship with its consultant JANA.

Our view at Investor Strategy News is that we have a duty to discuss difficult issues concerning not-for-profit super funds, which represent our core readers from our own commercial perspective, alongside all other industry players.

• The fifth story was the sudden departure of the chief executive of NAB Asset Servicing (NAS), Matt Brown, which we reported in the first edition of the year, and represented as another blow for what was then the largest custody firm in Australia.

NAS is now in recovery mode, with an energetic new chief executive, John Comito, and, despite having lost its mantle as the largest custodian, to J.P. Morgan, has picked up several new clients.

• The sixth story, the “Ramifications” story, hinged on the redundancy notices for the two most senior institutional sales people at Franklin Templeton, Kerrie Pratt and Jim Savage. It was all about head count and, according to the manager’s chief executive, Maria Wilton, in no way reflected on the abilities and hard work of the pair. This is the new world order. We questioned whether it was “juniorfication”, the new term which suggests that older and more expensive staff are being replaced by younger, more tech savvy and cheaper people.
• What turned out to be a good news story, with the birth of an expanding new boutique, started out as a negative one. It was the seventh most popular: “Goldmans Australia sale: the smart guys are getting out”.

This referred to the management buyout, backed by TA Associates, of the Australian equities and fixed income businesses of Goldman Sachs Asset Management. The resulting new firm, this month branded Yarra Wealth, has already recruited two big name industry professionals, Brett Davidson as COO and Mark Burgess as chairman, and will be adding a few more staff in coming months.

• Next, at number eight, was last week’s mishmash of a story combining the previously published rumour of a merger between IOOF and Perpetual with a dated report questioning the validity of a newspaper attack, by the SMH’s Adele Ferguson, on the activities of certain planners within the IOOF group. The report – actually there were two – were written by consultant and investor Dominic McCormick, and already published by Graham Rich a week earlier on his Portfolio Construction Forum newsletter.
• The last two of the Top 10 remained consistent to the theme. They were: industry fund Equip cutting some senior positions following a move to inhouse passive investments, and; Graham Mather’s departure from Mercer, where he had been head of investment consulting, analysed as part of a trend which represents a problem for asset consultants generally.

We published 391 stories and sent the newsletter to 9,600 people on average each week. About 330 of them unsubscribed. Our average click-through rate was 31.5 per cent, which is about 50 per cent above the industry average, according to a study by the Australian Communications and Media Authority. The three-month rolling average of newsletter opens was just over 50 per cent.

One of the many issues facing publishers is that with the massive explosion of sources of information, including “fake news” which has recently engulfed Facebook in a political scandal, is that people don’t know where they read what they read. Aggregators reprint unverified press releases all the time. Trade publications are becoming wire services.

Our aim is to provide a reliable, but alternative, source of news and analysis for the superannuation industry.

We hope that all our readers, sponsors and advertisers have a great Christmas break.

Links to the top 10 most popular stories, in order of numbers of clicks, are:

http://ioandcdevelopment.flywheelsites.com/t-corp-senior-management-spill-new-structure-for-a-new-future/

http://ioandcdevelopment.flywheelsites.com/mercer-sentinel-wins-biggest-ever-tender-with-t-corp/

http://ioandcdevelopment.flywheelsites.com/jp-morgan-set-to-win-big-t-corp-tender/

http://ioandcdevelopment.flywheelsites.com/rest-investment-model-under-the-spotlight/

http://ioandcdevelopment.flywheelsites.com/nab-asset-servicing-suffers-another-blow/

http://ioandcdevelopment.flywheelsites.com/the-ramifications-of-a-relentless-focus-on-costs-and-fees/

http://ioandcdevelopment.flywheelsites.com/goldmans-australia-sale-the-smart-guys-are-getting-out/

http://ioandcdevelopment.flywheelsites.com/ioof-that-scandal-and-the-perpetual-rumour/

http://ioandcdevelopment.flywheelsites.com/equip-cuts-senior-staff-for-passive-in-house-strategy/

http://ioandcdevelopment.flywheelsites.com/another-one-bites-the-dust-mather-to-leave-mercer/