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Magazine Issues » Jan-Feb 2022

Opinion: Innovation and danger

Elizabeth_PfeutiLike many, over Christmas, my husband and I made the most of the food, drink and general merriment on offer and decided to cut down as the New Year dawned. Not only did we donate leftover mince pies to our garden bird population, but we threw a tablecloth over the wine rack in the dining room – out of sight, out of mind. (Wo)man cannot live by bread alone, however. So, to sustain what we hope will be a dietary reset over the long term, we needed to look for other options. 

Our attention turned to a staple – cheese. Coming from Swiss heritage on my father’s side, complete avoidance won’t work. From experience, I can tell you that supermarket and even big-name cheesemakers’ low-fat options could give Goodyear a run for its money. Both rely on a strong brand to sell their wares, even if they don’t produce what the consumer actually wants (lower fat content AND flavour). Instead, I scoured the internet and found a small producer in the provinces, which has a full line of tasty cheese (Red Leicester-type, smoked, soft), all with a dramatically different nutritional and dietary profile (i.e. better) than anything I can find off the shelf. 

The producer has spent years developing and testing its cheeses to create a truly innovative, sustainable and tasty line of goods. The price point is not too far from where some of the larger cheesemakers sell at, so our cheese larder runneth over. 

Now, to booze. I unashamedly like a tipple. But, as we were researching the options for our new lifestyle, we realised we actually didn’t want a ‘make do’. Not that there’s anything wrong with the booze-less beer and spirits that are popping up everywhere these days – the jury is still out on the wine – but if I’m having ‘a drink’, I want ‘a drink’. 

Cue an internet search. Thanks to algorithms, a fairly decent selection started popping up on social feeds. The range is varied if not extensive, but it seems the market is growing apace. We chose a couple, both from tiny producers, and have been pleasantly surprised with the results.

So, what does this have to do with fund management? Innovation – and danger. Traditional assets, strategies and means of generating returns are just not cutting it anymore. Investors need something new. In some cases, they want something that echoes what they know and love, but with a modern tweak to suit what they need today and in the future. In others, they want something entirely different – something that can satisfy an old need in a new way. And that is likely to mean young, plucky start-ups will mushroom as they have before. 

Innovation has always been needed in fund management, but now it is an urgent requirement. Inflation, a supposedly temporary visitor, is likely to turn into a long-term house guest, while financial and corporate regulation on sustainability is being churned out quicker than ever. CIOs, strategists, product specialists and consultants must keep pushing on both of these two prongs of innovation. The risk isn’t just that smaller upstarts will take market share – it’s much more important than that. Without the tools and new ideas investors need, they won’t meet their obligations, meaning pension funds, insurers, charities and individuals will be left financially short of where they need to be. 

For many of this industry’s clients, if the money isn’t there, it can’t be smoothed by an accounting function. It amounts to real failure rather than an embarrassing quarterly report. This is our new fiduciary duty – let’s look forward and innovate to meet it.

By Liz Pfeuti

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