Creating a healthy workplace
With Damien Mu, CEO of AIA Australia and New Zealand.
Hear how Damien Mu went from working in the mailroom to be the CEO of AIA Australia and New Zealand, one of the countries largest life insurers.
He also shares how he has built a purpose-led organisation and what workplaces should consider to support mental and physical wellbeing.
Matt Heine: Hi Damien and welcome to the show.
Damien Mu: Hey, Matt. How you doing?
MH: Really good. I was actually thinking this morning before our podcast, I'm not sure why it's taken me so long to get you on.
DM: Oh, well, we've both been pretty busy, but it's good to finally connect. How have the podcasts been going?
MH: Yeah, they've been going really well, actually. I was getting some stats from my colleague the other day, and last quarter we had 5,000, so it's great to have a growing audience. It's guests like you that come on the show that keep it growing, so thanks again for coming on.
DM: No, and well done for doing them. I think it's really important right now in the time we are, that we're all connecting and sharing and learning from one another whatever we can. Well done for doing the podcast.
MH: Thank you very much. Now, Damien, we've known each other for a long time. I was trying to work it out. I think it's probably getting close to... definitely 15 years, maybe longer, both when we were back BDM-ing in Victoria.
DM: Yeah. It's been a long time, mate. Lots happened since then, hasn't it? But it's been good. It's been great.
MH: It has been good. As you know, I'm often very thankful because you convinced the AIA board all those years ago to take a bet on us and to set up our first group policy.
DM: Mate, you had the vision. It was clear that you had a successful strategy and purpose of what you were going to do, and we just wanted to get on board. We thought it was the right lane, and I'm glad we were, man. Congratulations on all the success you've had.
MH: I appreciate that. Let's maybe go a bit of a deep dive into your career, because it's been a really interesting one. Like I said, you started off back in the day BDM-ing. How did you go from doing that to what you're doing now, as CEO of I think the second or the largest life company in Australia?
DM: Well, I think we're second. I think TAL's got that nod, but across ANZ, we're doing all right. For me, interesting, I think I actually go back and I was thinking about where did it all start. My first job was in the mail room at Colonial. We actually now own Colonial Mutual. They should have just kept me in the job there. But I started in the admin team logging in the mail. I actually absolutely was thinking about how much I loved that job because it was really just about getting in and making sure that we could log the mail into the system as quickly as possible so if a customer called, we could respond to their queries because that's how it was done and there's no scanning, no anything like that.
I used to get in, and I'd want to get the mail done as quickly as I could so that it gave me extra hours to be able to then learn other things in the team. It was just really, right at the start there, was that sense of being part of a team working towards a common goal. I just really felt like what we were doing as a team to get the claims paid or deal with the customer inquiries was just so critical. So, I think back then, it was really establishing my joy in being able to work hard and be part of a team who is achieving something.
It just went through there, went through working through in different opportunities through Colonial and then out in insurance and claims and super. As you know, it's really, I started in operations. So it was really operations was my thing, as the manager of the Colonial Master Fund, new business and admin, and then just being a good old Victorian boy who loved his football, when CBA bought CMLA, it went across to Sydney and I went across and transitioned the business for six months and then wanted to get back and make sure I didn't miss out on the footy and went from there.
But then, my real first job into the distribution side after was to... I looked at my career and said, "Hey, I've done a lot on the ops side and in relationship side, but haven't really been in a true distribution role." That's when the opportunity at AIA came up and moved across. That really helped me to get a deeper understanding from the end-to-end dynamics of the business. The front of the business right through to the important elements of the operations to deliver. Again, Matt, it was just the, really, I guess, at the core of it was being able to think about how we could develop a plan that... or actually a goal and a dream really for the business and harness a group of people to get on the same page to try and deliver that. That's really how I fell into the CEO role. Just I think people always get fixated with where am I going in the future? I always say, my best bit of advice for people is have one eye to the future, great. It's good to have that, but just focus on doing the best you can in what you're doing right now. That's the first part to getting the next role.
MH: I think that's a really interesting point, but you have had a remarkable career in running a very large business now that's been through many ups and downs and continues to go through many ups and downs. From a staffing perspective, you've doubled in the last couple of years. You must have developed your leadership skills or passion along the way. Were there people that you looked up to or that mentored you, through that process?
DM: Yeah, absolutely, Matt, I think it's happening all the time. So leadership for me is a privilege and a responsibility. It's not an authority, it's not a position. It's about having an impact and that you want to have a positive impact. As I've said, many times, my mentoring for leadership started all the way when I was born. When my grandmother, who was my hero, migrated out to Australia to give us a better life. I was born in this wonderful, blessed country and looking at how she was an amazing leader that said little, but worked hard and did everything for the family. Then you move along and then I see my dad, who did a cleaning job in the morning, worked as an accountant during the day, studied at night. And you see how... get all these things. Then I've had some phenomenal mentors along the way, whether it's board members, group executives in the region, friends here, and learning from this to other colleagues in the industry or in sport. They're everywhere. But yes, I have definitely been fortunate to have a lot of good people around me.
MH: One of the things that I've noticed from afar is that you've managed to really instil a sense of purpose in the business over the last few years. You've really changed, I guess, the culture of the business from being a traditional life company to really health-and-wellness company with a real focus on helping people be better. How did you drive that? Or what sat behind that?
DM: Well, I mean, I think for us, first and foremost, I think purpose is a word that's used a lot now, but I am proud on the fact that we have genuinely tried to become a purpose-led organisation, and we define purpose-led in the context of AIA as both caring and demanding. I think the key tenet of being a purpose-led organisation is that you have to care, and that's not just from 9:00 to 5:00, that's 24/7. We talk about caring and demanding, but our purpose is really what binds us all. Our purpose is to make a difference in people's lives.
We have a pretty big dream, which is to help champion Australia and New Zealand to be the healthiest nations in the world. That is really because when we step back and think about the fortunate and this position we have and responsibility we have as a life insurer to help Australians and New Zealanders and their families when they need it most, supporting our advice networks and our superannuation platform partners and others to really help Australians and their families when they need it most. What we recognise is just how much we all value our health.
I'm a big believer in, as again, going back to reflecting on life and for two generations, you saw how purpose was really helped keep a whole nation focused and the dream was to own your own home. And it helped governments set agenda, it helped people understand that there was something bigger we were all working collectively towards and people would, everyone had a purpose in terms of, "Yeah, go and work and do my job for 15 years, whatever." But it was towards a purpose. Then, when you think about it, I think that that dream has evolved and that's because of things like intergenerational wealth, globalisation, et cetera, et cetera. We still want to own our own home. Don't get me wrong. That's a massive goal. But the dream underlying it is really a healthy, longer better life in this blessed country of ours. That's why we want to own a home here.
So, for us, it was really about recognising that we could have a significant and profound impact by championing this dream. By not only being there to protect people when something goes wrong, or help them get back to work and recover. But how could we get upstream to really help them make the small changes to leading a healthier, longer, better life? That really came about, Matt, with the introduction to Vitality, our wellbeing programme, where we got to understand, it was eye-opening for me, behavioural insights, behavioural economics, and that if we could marry the behavioural and the financial economics together, you had a really powerful combination. Think of it like head and heart, or the what and the why coming together.
That was really about a missing element for us, which was how do we bring behavioural economics into what we do? How do we understand that that there are in Australia, when you look at the Oxford Health Alliance Model, there are four lifestyle behaviours that led to four of the non-communicable diseases that cause 90% of deaths in Australia, and globally, that's around 70%. Now, the reason it's higher in Australia and similarly in New Zealand is because it is lifestyle choice. So if we, as opposed to things like not having immunisation, clean water, education, healthcare systems, et cetera. So we've actually got a real chance. This is in our control, but the fantastic insight is that it isn't about big things. This is not about having to go out and run a marathon or go on some crazy fad diet.
This is about taking just little steps along the way, to maybe walk a little bit more, sleep a little bit more, meditate, things that we can all do and just eat a bit more of a balanced diet. Those small steps, if we think about it in financial terms, compound interest on savings or investments, those little makes a big impact over time and similar to those small changes.
So we decided that we wanted to be a purpose-led organisation and everyone had to understand what we're signing up to. That, as I meant, for us, was about ensuring that we were aware of what that meant to be a caring organisation for our people, partners and society, and also demanding, because you can't have a dream and not get on with the work and demand better from yourselves. So that really was very, very powerful for us, Matt. It's really bound what we call the army of MAD, make a difference across Australia and New Zealand.
MH: Yeah, no, it's absolutely fantastic. So you mentioned those four elements before, what were the actual four?
DM: Yes. So obviously, we look it as the four pillars to keep it a little bit simple, but really, the four lifestyle choices exercise, diet, but now we absolutely know that mental wellbeing is really important, how your mental wellbeing as well. Of course, we talk about the fourth one as being planning well. But the four lifestyle choices are really around smoking and alcohol, diet, exercise, those types of things. But I like to keep it a little more simple and think about, we call it, a move well pillar, eat well pillar, feel well pillar and planning. Planning's really important, just like we talk about, you and I talk about the importance of advice in planning for your financial retirement or future. Even for your wellbeing, you have to plan it out, simple things like being able to find some healthy greens at lunchtime when you work in an office environment, isn't easy if you're not planned.
MH: I think that's an interesting point. You'd be sitting on a lot more data than most businesses around, I guess, the health of the nation. More importantly, how the health of the nation is changing over time. Really interested, personally, I know that over the last six or seven months, having been at home, I've taken the opportunity to make those incremental changes. A little 1% changes to, I'm hoping, will become lasting habits. What are some of the big things that you've seen occur over the last six months? If we focus on the positives as opposed to the negatives?
DM: Yeah, no. I mean, absolutely, Matt. We have, we've looked, we've done the research. Just so you know I think that the big one has been, the one that has crept up and grown very quickly in Australia has been the incidents of mental health. Okay? So that is not good. That is now, it's the largest reason for disability globally, right? So it's a global issue, but in Australia, second or third highest cause for claim now, and that's not good, because that's robbing people of the dream of happier, healthier, longer lives. So we need to face into that. But what COVID has done on the positive side of that, so yes, there's issues of isolation and connectedness and impacts within this. But on the other side, what we are seeing is people living a little bit slower. I'll give you an example.
I haven't done 150 flights this year. I haven't seen you in the airport every second week. People are walking. What our research shows, we survey our members and customers quite a bit around this to keep in touch with them. They've seen improvements in their diet, because they're eating at home more and cooking more. They've found an appreciation for that again. They are walking more and getting out there and recognise that we've got these wonderful parks that have lots of space and appreciating nature and getting out there and doing that. Connecting far more with each other in a caring way. So people are reaching out, not just to catch up and go for a beer or a bite or whatever, but actually catching up and reaching out and saying, "How you doing? Are you good?" Checking in on each other. So that has been a really positive change.
Look, I always found excuses. I've been riding bikes with Bailey and Kai and the family. I mean, that just wouldn't have happened if it wasn't for some of these things. So I think we're seeing people making some really positive changes around diet, around getting out there and moving more, and actually taking a more caring interest to connect in a genuine way rather than just a traditional, "How you going, mate? Yep, yep, good, cool, all right, see ya."
MH: I've heard a comment recently, which I thought was a good one, that people aren't necessarily worried about going into the office in the future. They're worried about going back to their old life. Given many of the things that you've just talked about and as a leader and a company promoting health, how are you going to adjust the work environment or the way that people work in the future to make sure that they still have time to do all the things that you just talked about?
DM: Yeah, Matt. That is the big opportunity and challenge. So one of the things I'm really concerned about is that we just come back to life. We have to come forward. Words are very important. In fact, through COVID and others, words have just become so important, right. Because we're communicating more and the way we communicate over email and other things or Zoom or others, it becomes important. So I really hope we come forward to life. That means don't bring back all the things. Let's be honest. I don't want to do 150 flights next year, do you?
MH: Neither. Definitely not.
DM: Right. So if we let that happen, it can happen. It's that easy, right? You have a look at even what happened with Victoria over the weekend, fantastic news that finally we're easing, but didn't take long before the roads are packed again. I want to make sure we come forward to work and bring forward some of those really positive, but I think we know that fundamentally the workplace will change and digital technology and now that we've all got used to Teams and Zooms and Webexes and others means that, and we've proven we can work more flexibly and from home, means that that environment has changed.
But as we plan, these are the two things I'm thinking about. How do we create, what is the reason we want? What is the use of the office? The office is really about connectivity, creativity, and performance. How do you keep that connectivity going? How do you get the collaboration and the creativity going that you can't always do it on the screen? And how do we make sure we're being productive and performing? That's what we want to create our office environments to do. But I caution anyone who is running to say that, "This is the new normal, let's start planning. Let's get rid of this. Let's do that." We don't know what we don't know yet. So we've got to be careful not to get on, like we do in many instances in life, the fast train.
My view personally is, what I'm saying to our teams and that we'll announce later, is that we're going to do two sprints. That's because again, very early on, Matt, what I wanted to do is within two weeks of COVID happening, I wanted to come out with a what we call our survive-revive-thrive plan, which was connecting to the mood, not just the business thing. That was just three simple things. Our first objective was our staff wellbeing, safety, and productivity, so that we could, secondly, make sure the business continues and we could support our customers and Australians and partners and New Zealanders when they needed it most, because we play a really important role. The third one was then re-imagining the future and how we would need to pivot or change or adapt the business. That's still a work in progress.
And you go through survive and get to revive. I said to the team, "We've got to feel really comfortable in this spot, because it's going to be a while before we thrive here, because we don't know what's coming." I mean, we're part of a world, and not just a state or a building, but so, the two sprints and you will appreciate this. I really just said, "Well, agile ways of working are here." So why wouldn't we do the same and give our team some certainty. So from the end of Jan, when everyone comes back, we're going to have a sprint for 90 days, where on average, people will be in the office two or three days a week. We haven't decided, and we're going to trial that.
Here's the five things that we have to do. The five things that come with that. One, everyone has to log on and click a mood metre and log off. There's not going to be meetings Friday afternoon. Simple little things, four or five things, and some meeting protocols. Of course, not everyone's going to be in the office on the same day because of capacity loads, but we're going to trial that, we're going to get the learnings, and then we're going to do one more sprint. By then, hopefully, we've got a lot more certainty around what's happening with COVID, but also have got real data points rather than assuming.
Because I'll give you an example. In NZ, our team, only 10% came back to the office after level one in the first couple of weeks, 15, 20%. Now, literally four months later, we're up to 65% want to be in the office. So not full-time, but have that. I'm really excited. We must retain flexibility. Even before COVID, we had our quarterly recharge days, which everyone had a day off to do whatever, also because life happens. But moving forward, I think what a fantastic opportunity, if we can, at least that. People will have the opportunity to work at least two or three days from home and plan their life around and have that flexibility.
MH: It's also pretty convenient being able to test it overseas, in New Zealand first to see what the reaction is there. When you say 65% were back in the office, is that 65% back for a couple of days a week? Or what was the typical work pattern?
DM: There's a small group that are there full-time and that's fine. But when I say up to 65%, 70% at times have come back to the office, it's on a more hybrid-basis. But I think what it's shown is that we shouldn't assume just from the first month that no one wants to come back to the office. There is a real... novelties wear off quickly. Just sharing personally, I've found we've been able to do 80% of, I mean, I've been able to function probably at 70% capacity, not... I've been working 200% and 24/7 with the Zooms and the others, but I'm at about 70% capacity. There's just some things you just can't do as effectively without getting people together. I know that teams can connect. Everyone in a Zoom can connect to everyone, but sometimes you just need a whiteboard and some people around. And that's not to say you can't do that digitally, but in the same room, bouncing off each other, getting things done and closed, without having to do, "Okay. Well, how do you stop that and that? Oh, now. Gee, I just had this conversation, but I can't just go around the corner. I'm got to now book a meeting with X and Y and whatever."
MH: Definitely interesting times. We could talk about this for a long time, but I'm conscious we've got a limited time together. As a Hawthorn tragic, I've noticed in the news recently that now the, is it the health and wellness sponsor for a number of the football clubs starting with Hawthorn?
DM: Yeah. I mean, one of the things also in this latest environment, is just recognising just how important our sporting community is in terms of keeping people connected, engaged, and just how much they missed it. Even though it wasn't the usual season, people looked forward to any bits of the AFL, NRL and the AFLW. I always say, make sure... people know we're working with the AFL, I always say, "Don't forget the W," because it's easy to do, people to assume that, and similar with netball and others. So what we are looking to do is support our... Because as I mentioned, if we want to champion Australia and New Zealand to be the healthiest nation, then being active and getting out there and doing activities is really important, but what we find is so many Australians and their families love their clubs. Not just AFL clubs, I'm talking about whatever clubs that they're... that's where they spend their time.
MH: All clubs.
DM: So this was really about working with the clubs who have, in this instance, we started with some of the AFL clubs, North Melbourne, Hawthorn, and Essendon, and there'll be some more coming out and then across netball and others where we want to get out there and help the clubs who have Australians there every day, part of their community, work together to help them learn more about their life, health and wellbeing. So we're their life, health and wellbeing partners. Of course, that is looking at how we can help them, working together with the club, a shared value opportunity for the club, the members and their families, and us to champion the course.
MH: Excellent. Damien, it would be remiss of me not to ask you your thoughts on the industry. You've obviously been in it for a long time and you're very much front and centre of all of the reforms and changes happening within the life insurance industry. Where are some of the challenges that you're having to face into at the moment, and more importantly, where are the opportunities? What should advisors be thinking about?
DM: Yes. It has been a challenging time for many years for our industry, with advice, insurance, wealth generally, when you think about all the way back to FOFA, and then going through Royal Commission, education standards, lift reform. We have had to be one resilient bunch.
I'll talk about it in two elements, but my overarching message is one of hope because the underlying data does not lie. That's why we say, the concern is for the first time in a long time, there is a growing gap and need for protection in advice. That's because we, as an industry, have all been disrupted, for want of a better term. That's really, you can't deny, that's the market growth is down, the number of advisors is down, the number of people getting access to insurances is reducing.
Even when you see what's happening in super and pools of people being insured are no longer insured. So that is a real concern, but underlying that, and what I'm concerned about is, one, making sure that there is a rational, evidence-based discussion around looking at people's protection needs, retirement needs far more holistically, including their health and wellbeing, rather than just little pinpoints, right? Because we've got to think about it in the overarching system and how important it is people get access to advice and the role of advice and role of... and making sure there's choice and value that comes with the quality that they can access around that. So we've got to make sure we protect that and making sure that people get access to that. Got to obviously make sure that there's sustainability and affordability is front and foremost for many, because obviously that's a key issue.
But also the remuneration, I've been very clear, leave it alone, please. Can we please just leave it as it is? No more changes, please. We need to get on. This issue is an old one and needs to be looked at far more holistically. So, we don't need any more changes to remuneration frameworks that mean that everyone has to do more with less and make it unsustainable because then we're going to have an even bigger advice gap in growth, but here's the, I've seen many advisers and other organisations say that actually this has been a great time for them to really improve their business and look at how they can, as I said before, thrive into the future, by thinking about how they can do things more efficiently, differently, partner with insurers more by saying, "Hey, we've got to do things collectively to serve their client better and support their client better."
So there's a lot of innovation coming through, Matt, on digital and other things, which is fantastic, and Netwealth and yourself are innovators, right at the forefront of all that. So I mean, I think others are trying to catch up now and look at how we need to do that. But the underlying, what we've got to do is look at the macro opportunity, which is what we should all be focused on. So while we get distracted by all the people go, "Oh my gosh, the market's going down, da da da da, this is happening," we have a $4.2 trillion protection gap in Australia. Customers, Australians that have a $4.2 trillion [inaudible 00:28:27]. Now, let's just say those studies are wrong by 50% or 75%, there's a huge need. A huge benefit to society and the economy, if we can help meet that need.
So that's the most important part of any economic discussion, supply and demand. There is a demand because there's a need. So what we now need to do is look at how we adapt to meet that demand by creating the right supply chains, which is working together as life insurance, superannuation platforms and our advisors to meet that need. So, yes, we're going to have to pivot a bit, but do not forget the underlying message of hope, which is there is a need, so we've got to meet that need.
MH: In your mind, is that about using digital tools to deliver the cost-to-serve with an advisor? Or is it about actually creating new digital channels entirely?
DM: Oh, no. Both, but not to serve as in just go direct, that's not, I mean, AIA's model is we are a partnering business, right? So what we want to do is make sure that we are providing better digital solutions or technology solutions and more efficient solutions to partner with our partners, whether they be advisors or platforms or others, but what we do want to do, and what we have done is I think insurers have to take responsibility to help the fundamental issue around the value of insurance and the engagement with insurance, before even advisors have to do all the hard work. So this is the missing part because what's happened is we've just sat back. So my view on digital from a direct perspective is to create more engagement and content with life, health and wellbeing, so that Australians can understand and get... not understand, but want to engage more on this topic. Then when they talk to their financial advisors, they're ready to go and understand who these three-letter organisations are and what they stand for. We do our bit. So that's what I mean by becoming a little bit more digital and content-related on that side of it, because there is a real gap of awareness and understanding when it comes to life insurance, and health insurance, because we're a health insurer as well.
MH: Yeah. How is that going? Because that's quite a new venture for you.
DM: Yeah, that's been really good. I mean, what's great is you can see the differences of when you have a startup and how you can move nimbly and do all these other things. You can learn lots of parallels from life but they're very different, right? Very different. Both are there to support Australians when they have a health issue, but one's very much focused on temporary, short-term issues here and now, whereas with life, it's more complex, difficult scenarios. But what's great is we're able to partner them through their whole journey so whether it's upfront to help potentially prevent things by working with them through Vitality, to be healthier, something little thing happens, health kicks in, and we can understand and how we can intervene more because ours isn't just about pay the claims, thinking about how do you then also support them so if they've had that issue, how do we make sure they make a full recovery or help them make a full recovery? Then obviously, the life's needed there as well.
MH: Yeah. I should have asked you earlier for those. I imagine many people would be aware of Vitality, but do you want to just quickly describe to the listeners what Vitality is and why it's so important to your story?
DM: Yeah. Look, Vitality is really important. I mean, Vitality is our health and wellbeing programme. It's the world-leading health and wellbeing programme, and we didn't found Vitality or create Vitality. It was founded in South Africa over 25 years ago. It's got over 10 million people globally that are on the programme, I think even more now across the world. It's got 25 years of deep data and history, more, so therefore it is the world-leading science-backed programme and it's about behavioural economics. It's simply about keep it simple. It's about how we can understand more about our health and our vitality aid, which is our life-stage aid. Because that's something we can control, lifestyle behaviours and things, personal pathways to improve their health. So helping them get onto their plan to move, eat, feel better and then rewarding them.
The engagement's been fantastic. I think I had a look the other day, there's 150 billion steps taken by Vitality members, 3 million gym visits, and Vitality members, 70% of Vitality members improve their vitality age. 900,000 wellbeing assessments have been done.
DM: Yeah, but this is not fund-writing. This is just for people to learn about their health. 50% did the mental health wellbeing assessments. So people want to know about their health and wellbeing and we see that from our content. Our OneLife content reaches around 14 million people with our content. Again, I think it's people like to engage in and that's what I mean by digital. Let's engage on that stuff. So when people are then coming to talk to their advisor, who can give them the appropriate advice around their needs, help them through that, they're feeling more positive about this thing called life and health.
MH: Yeah. It completely changes the conversation. I certainly know. Thank you to you and the team, our staff have been really engaged with Vitality over the last six months. I've seen lots of people downloading the meditation app, but a lot of people are doing, we're all doing, many of us doing virtual PT and getting points for that. Whilst they can't just claim them for cheaper flights at the moment, there's a range of other things that they're getting the benefit of.
DM: Yeah, Matt. You would have seen, so isn't it great how we can now... I mean, this is a great example of digital. Just wouldn't have been able to help each other, right. Like with the virtual PTs or the workouts with our ambassadors or whatever, or the podcast that you're doing to get out there and support and connect with people. It's just fantastic to be able to... These are some of the good things we've been able to do and now it makes it more accessible for everyone. So guess what? Even if you're in regional parts of Australia and you can't get to a certain location, you can still join in. We've done virtual Mother's Day classics and all sorts of stuff.
MH: Damien, we're going to run out of time shortly, which is a pity, but you've achieved a hell of a lot over the last many years. What's next?
DM: Look, to be honest, Matt, I just am focused on championing this green right now. I'm really blessed to have an awesome team here at AIA and be part of the AIA group, but also have great partners like yourself and others that we're all working towards an outcome to help Australia be the best it can be.
But in terms of next, honestly, who knows, who knows. Oh, that's a bad, horrible answer. But like I said before, I'm actually really focused on what I'm doing at the time. It's been so busy and such a good ride and yeah, that's what I'm focused on at the moment, but I'm sure it'll reveal itself.
MH: I love it. A very honest answer. And thanks so much for your time. Really enjoyed the chat and look forward to hopefully catching up in person soon.
DM: Yeah. Thanks very much. And again, thanks for having me, and well done on the podcast and also all the great work Netwealth has been doing to support Australians and advisers. Thank you.
MH: Thank you.
In this podcast series Matt Heine, Joint Managing Director of Netwealth, chats to industry professionals and thought leaders on what opportunities and challenges they see for financial advisers and the wealth industry as a whole.
MH: It sounds like you fell into finance journalism. I'm not sure if that's what you set out to do when you started your career. I know that you're an avid follower of fashion. Did you ever think about-
MH: Did you ever think about moving into other industries or doing something different?
MB: No. I did contemplate working for a women's magazine. I do a run a women's blog for the Filipino-Australian community. I do that, but I just can't imagine starting my day talking about shampoos and which shampoo or conditioner would work well for your hair, so the short answer is no. I do love finance journalism. I feel at home. I feel like I'm in my element. I can't imagine doing healthcare writing or beauty writing. Fashion, I'm very passionate about arts and culture, so indigenous fashion is one of my pet projects and I combine that with some charity work once a year.
MH: Excellent. If we fast forward to today.
MH: As a Financial Standard has been, I guess, your baby for many years now, and recently Rainmaker purchased the Money Magazine from Bauer Media, how did that come about? Because ultimately they're very different audiences, even though both are writing about finance.
MB: Yes. The journey started a few years ago. It wasn't something that we thought about this year and the deal just came through. It was really looking at where Rainmaker sits in the of wealth management. Our mission has always been to provide leading financial content for both the industry and for consumers. We just didn't know what title would fit or whether it should be organic. Chris, our group managing director, said, "I can't think of any other title that we would consider except for money."
The conversation started from there and I think it took a couple of years or so before it did happen. Behind the scenes, we probably had to work for a year to look at integration, what it means for the business, what the week to week would look like. We thought it made sense because even if we are talking to the trade industry, i.e. financial planners and fund managers, we've always looked at ourselves as the publication for the wealth management professional.
You don't have to be in the industry. You just have to be someone who wants to truly understand what wealth management looks like.
MH: Given that the audience for Money Magazine has traditionally been, tell me if I'm wrong here, just non-advised or DIY investors, did you find that you putting on that different cap was difficult initially?
MB: Short answer is yes. I think there is definitely this sense of DIY advice as something they can do. They're successful professionals in their own space, architects, engineers, people that are quite comfortable around numbers, but it was more looking at, well, why is that? I ask myself, "Why is it that you have this cohort of people who have a combined household of $150,000 in annual income, most of them have fully paid their homes. They have a few million dollars in their investment portfolio, why is it that they're not seeking financial advice?"
One, our language was very different in the way we write the articles. Two, we're only really in year two of embracing Money. It's still like a learning curve. What does that mean?
MH: How has the integration gone? Because you've got two very successful businesses coming together with very different cultures and outlooks, has it been challenging? Has it been easy? What advice would you have for people that are putting any businesses together?
MB: Yes. Good question. Knock on wood. It's been fantastic so far. The integration has worked well. In fact, I'm looking across to the Money team, which is next to the Financial Standard team. A lot of the Financial Standard journalists contribute to Money and the Money team would sometimes provide news story leads to the Financial Standard journalists. That really all comes from just making sure we communicate why we have both teams and what is it that Rainmaker as a publishing and research house want to achieve.
Essentially, we just really want to provide leading content in finance. It doesn't matter if you're a super fund, a financial advisor or the end investor.
But we did hire a project manager to just do it step by step and making sure everything's organised. Things that you don't really think about like the number of cabinets in the office, IT needs training. Do we have enough space? Style guide, how do we write Money versus how do we write for Financial Standard? On the whole, I think it was incredibly important that we had a project manager just focused on integrating Money into the business.
MH: How long did that all occur before COVID hit and everyone had to move to remote working? Did you have time to get to know each other?
MB: Yes. It does feel like March is a big month for us. We purchased Money Magazine in March last year and then a year later here we are with COVID. We do have a small Money team, just the managing editor, editor-at-large, a journalist and our online content producer, plus two in production. The rest are contributors, including of course, Paul Clitheroe, Pam Walkley, Vita Palestrant, all these finance journalists who have been in the industry for decades. It was easy because of just the size of the team, but it was hair-raising.
I'm just really impressed with our IT team that they were just able to move all of us literally in the space of two weeks, so yeah.
MH: I think of all of the industries that have been severely impacted by COVID and media would certainly be up there. Financial Standard and Rainmaker have always had big events programme as well as a large print circular. How has that changed over the last few months? What lessons have you learned? More importantly, how have you pivoted the business across all of your different mastheads?
MB: Yes. Again, a good question. Just like in wealth management, diversity is incredibly important. I'm very lucky that I'm part of a business that has four legs, data, research, media, and events. The events business was definitely hard hit. We just had to cancel everything and then take a step back and think, "All right, so which ones do we proceed with this year and how are we going to do it?" How did we pivot? Again, we have a marketing and events team, and we're fortunate that they've just adjusted to it and thought, "These are the things that we can do as video online."
Definitely it was still hard because of the logistics of trying to organise everything. For example, if we wanted to interview someone from Melbourne and we can't do that. At the moment, it is the events business that took a hit because of COVID but slowly, we're trying to figure out, well we've already finalised our 2021 events calendar and we've proceeded with all our events bar, the MAX awards, which we had to do online, and all the forums had to be done online, including the Managed Accounts Forum that went out just yesterday.
MH: Is the feedback from those that have been attending the virtual it's been good?
MB: You know that if you get one negative feedback, that means there's like a hundred people out there who think the same way. Fortunately, we've only received positive feedback and it's not because we have bells and whistles in all our video products or all our video on demand series. People in general understand that this is all new to us so there's a little bit of room to say, "Hey, as long as the audio is great, as long as we've got the video, as long as the content is great, we're good." That's the story so far.
MH: What's your current thinking about post-COVID when we have a vaccine and life goes back to some sort of normal? Will you do a blended agenda in the future and have some virtual, some physical events, or you haven't thought that far ahead?
MB: No. Not yet. We haven't really thought about it only because I understand that technology already enables everyone to do videos and to connect with anyone they want to, either through social media or through MS meetings. For example, I didn't know that MS meetings existed before COVID. What we're trying to focus on is where can we provide value to our readers in a world where everyone can do video content, can do podcasts and basically reach out to you however way they want?
MH: Speaking of that business model innovation, again, going back to the recent merger with Money Magazine, their business model is very different to, I guess, how you've operated within financial services traditionally. Generally just talk through the differences and where you see media going in the future, particularly in relation to digital disruption.
MB: Yes. The first thing I guess would be the business model where Money Magazine was part of a suite of other publications within Bauer Media. That meant that they had the benefits of scale because you have more than, let's say, 20 titles. They also worked on what they called a cost per impression model, which is looking at traffic in a way that it was foreign to me in that I know with Financial Standard, they're not just impressions. I actually talked to Matt, for example, or I know ... I've interviewed Ian Silk.
They're just not clicks. They are people who are influencing the industry. One of the things that we've had to really look at is, do we adopt the advertising model that Money Magazine had previously, or do we assess it from how we understand the audience are really in terms of how we think? If we're talking about advertising, how would they view the Money audience, but also how we've run Financial Standard, which in the last five years, we've now grown to more than eight titles. There's Financial Standard and then we have the journals and the good guides.
We decided we are going to change the business model. We've actually raised the price of some of the advertising assets and we've introduced new assets. That was a big risk, but thankfully it's actually been very good. The advertisers have been very receptive, and knock on wood, our readers have actually gone up something like 20 to 25% since we've acquired the title.
MH: I think that's an interesting point. Are you suggesting that because you've been able to go deeper and more specific to an audience, so around sustainability managed accounts, that you're able to charge more because the audience is more relevant?
MB: I don't know whether that's the case. It's more that we have the experience of knowing who our audiences are in the finance world. Whereas at Bauer, Money was the only finance title, arguably, compared to more lifestyle titles. It came down to knowing who our advertisers were and just assessing, well, what does that mean in terms of making sure that our business model is sustainable in the future? The reason I say that is that this is not news to you, Matt, but a lot of newspapers are reporting losses, TV networks, magazines, and you think, why is that? Aren't they pricing their cost base, et cetera, into their advertising?
MH: If we change gear for a moment, you get great visibility over every sector of the financial services market. There are some pretty big things occurring at the moment. I know that you've recently launched a sustainability edition. Can you talk about where that's come from and if you're seeing a big increase across all parts of the market?
MB: Yes. Definitely. With EFA sustainability, that conversation started between Alex Dunnin and our head of research and Rachel Alembakis, who's the Melbourne-based founder of the Sustainability Report. That really came out of Rainmakers identifying that there's a lot more noise around sustainable investing. You can actually measure sustainability, so the metrics are a lot more rigorous. We thought, "Well, who can we align with who's already in that space?" Rachel stood out because she's true to label. She rides a bike every day, organic and health food, very passionate about sustainability.
God forbid you start a conversation on climate change with her, you'll never leave her house. That happened pretty quickly. Unlike Money, which was a couple of years in gestation, that deal probably happened within six months or so. We don't want to change the content. We already have the experts, but we just wanted to give it, if you like, a stronger infrastructure around it. Now, the sustainability report originated as a instal publication for super funds and wholesale investors.
To answer your question around, I guess, for financial advisors, we're just dipping our toes now to providing more content around financial advice and sustainability. I mean, what do you think? Is that something that you're seeing amongst your clients?
MH: Yeah. Absolutely. I think particularly post-bushfires, there was a huge renewed interest in climate change. Advisers for the first time were actually getting significant demand from their end clients and therefore having to skill up and look at what options existed in the market. No. It's, compared to even 12 months ago, a lot more interest in the sector and I think to your point, not necessarily a lot of information that people can look at.
MB: Yeah. Absolutely. One of the things that Rachel and I constantly discuss is that we better make sure we don't get into this whole greenwashing community where yes, it's on the label, it's sustainability, but really once you look under the bonnet, it's not. That's really the mission of EFA sustainability, to provide financial advisors and super funds with genuine content around two true to label, impact investing funds or sustainable funds, ethical funds. Then there are new trends as well. Like I think there's the blue ocean investing and a host of other things outside climate change.
MH: As far as the menu goes, financial planners, and this is a general comment, haven't been particularly good at really, I guess, vocalising the benefit of advice to the end consumer. What could advisors do to better leverage media and how can they get their voice out there?
MB: Yes. I know. I wonder why that is. I don't know why. There's such an opportunity to really talk to even Money readers, for example. What I've found just in the last 12 months of working with the Money team is that there's absolute demand out there for good content around finance and almost incremental steps towards building your wealth. How do you invest with less than $10,000? How do you buy your second or your third investment property? One thing I would recommend is probably first do your research, know what's out there.
For example, they might want to look at the Money website and see what are the kinds of stories we're writing? They might be able to contribute on a story about estate planning or ETFs, for example, or sustainable investing. That's one. There are Facebook groups, I guess. She's on the Money is a great Facebook group for women and just money management in general. Not really financial planning. I just feel like a big segment of the public is missing out on professional advice and either it's because they can't afford financial advice.
I still wonder why financial advice is not a tax deductible amount and there needs to be more education. What can they do? Understand what are the different types of consumer finance websites out there and consider contributing a piece or so, or just offering an interview. We're always open to a financial planner who is an expert on those topics that I've just mentioned, whether it's on shares, ETFs or property.
MH: As opposed to trying to go out and find yourself a column, it's more about just trying to collaborate on individual articles or areas that you feel you have an expertise.
MB: Yes. Absolutely. Because that's what we do every day already. We would write a story or two on money in the morning, and then we send out the newsletter on the Wednesday. It's funny. One of the most embarrassing things that happened to me was at a career show and tell. We had a doctor, a neurosurgeon, an accountant, myself, and the host said, "Who here wants to be a writer?" Nobody said they wanted to be a writer. I'm like, "Oh, well, how am I going to inspire you guys?" Then a decade later everyone's a blogger, a podcaster, a publisher.
You can do that definitely, but there is merit in the financial planning community reaching out to publications, such as Money and other consumer websites.
MH: To avoid you getting 20,000 emails after this podcast, our financial advice is best to try and find a couple of journalists that they read often or follow and arrange a cup of coffee, or how do they go about engaging with the media because it's not a skill that many would have?
MB: That is so true. I'll tell you in the last 20 years that I've worked in finance journalism, I haven't had a female financial advisor call me to say, "Hey, can I contribute to your magazine or to your newspaper?" Look, I'm very open. You can just email Money at moneymag.com.au or firstname.lastname@example.org. Obviously coffee is out, but a phone call and a Zoom meeting. They're a friendly bunch. We're all very accessible here. We'll just get to know what their business is, what their line of expertise are and then go from there.
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MH: No. I think that's absolutely great advice and I hope some of our listeners take it up. Michelle, we're going to run out of time shortly, but I'm keen to understand what's next for you and the team?
MB: Yeah. I guess with all the uncertainty in the markets, and we don't really know when we're going to get the vaccines, at the moment, it's really just making sure that we're looking after our readers in terms of our content. It's not like we're expecting 200% growth or anything like that. Secondly, just making sure that the staff are okay. I mean, it is an anxious time for everyone. Thirdly, there was an offer for another title this year and we just said, "Nah, we can't do it. We've got our hands full."
What's next is just really continued growth for Financial Standard. You'll see more of Money Magazine. We are looking at some podcasts and videos in that space. Yes. If you have any financial planners who want to contact us and collaborate, let us know. We have EFA sustainability and Industry Moves to work on for 2021, so watch this space
MH: Sounds like you've got plenty on.
MB: Yes. We've got a lot. I mean, I do want to mention the FS Power50, which is our 50 most influential advisors guide that will go out next year. I realise that we can't talk to all 22,000 financial planners out there in the market, so we do try to support the financial planning community by working with all our FS Power50 advisors list. We talk to them, interview them, profile them for the entire year that they're on that list to just connect them with both the Financial Standard readers and the money readers.
MH: Michelle, how long has the list been running for?
MB: It's been six, or this is the seventh year now.
MH: Has the list changed a lot in those seven years? You've always got your usual corporates, but are you seeing a lot of new people coming onto the list and doing things in new and interesting ways?
MB: There wasn't a lot of change the first three years, because our focus was definitely on social media. That was a new thing back then, but I just had to look at the list this morning and you'll definitely see a change, but it is peer-voted. So they have to make sure that they do share it with the community that they are going to be part of the list. We're seeing a diversification on specialties, whether it's someone who's great on social, someone who's into ethical investing, for example, or retirement.
Technology that used to be like, oh only a fraction of the financial planning community know about, whether it's Asana or Monday or MS meetings or Instagram, but now it's a given. I think you've highlighted that in your advice tech report, that just being at the forefront of technology is no longer a nice-to-have. It's a prerequisite. We're seeing that with the FS Power50, where they are all using all these new tools to be successful.
MH: The FS Power50 list has really become, in some ways, an advocacy list for the industry?
MB: Absolutely. This is, again, really just shining the torch on best practise advice and then allowing them a voice to talk about their successes. Because as you know, with Financial Standard, with the daily news, we will be covering what's happening with the Royal Commission or legislation. Amidst all that, all the positive things that are happening in the industry get buried. We feel that FS Power50 is about championing good advice and showing the world, if you like, that yes, the U.S. have a different financial planning culture, same with Europe, but look at Australia. This is the next generation of financial planners who are going to shape the industry.
MH: Fantastic. Are entries currently open for the FS 50, or is it getting close to being finalised for the year?
MB: It's definitely close to being finalised. The voting has closed, so that's it for the year, but if anyone's interested, they can always have a look at all our previous guides and start prepping for next year.
MH: Also great advice. Michelle, that's been a fantastic chat. Thank you so much for your time.
MB: Thank you.
Views expressed are of the interviewee and may not be the opinion of Netwealth or its related companies.