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Richard Gilbert steps down at
the end of August after 11 years at IFSA, the last six of which as chief
executive. In that time, membership has doubled, the members’ total funds under
management has risen two-and-a-half times and the association’s influence grown
immeasurably. He speaks with GREG BRIGHT about the highlights and lowlights of
his tenure. When Richard Gilbert
joined the Investment and Financial Services Association (IFSA), as deputy
chief executive, in 1997, the industry was divided. IFSA had resulted from the
merger of three organisations representing managers and insurers – the
Australian Investment Managers Association (AIMA), the Life, Investment and
Superannuation Association (LISA) and the Investment Funds Association (IFA).

While
the consolidation of the three bodies was largely welcomed by their members,
many of whom were paying multiple fees, there was also scepticism about whether
they could provide a united front, particularly in Canberra, behind the new organisation. When
he leaves IFSA at the end of August, Gilbert, 60, leaves a much more united
industry – at least among the funds management core membership of the
association – and one which has undeniably got the ear of government, whether
or not the Government agrees with what it’s being told. Gilbert had been chief
executive of the retail-orientated IFA for about a year prior to the merger and
took the deputy’s job at IFSA under Lynn Ralph who was the inaugural CEO.

But
he was already more experienced in superannuation and financial services than
most of his contemporaries, his involvement with the industry dating back to
1991. After a stint as an economics teacher, Gilbert became the director of parliamentary
education in Canberra and then in 1991 took up
the position as secretary of the then-new Senate Select Committee on
Superannuation, chaired by the young Labor Senator from Tasmania, Nick Sherry. “I learned about
superannuation by listening to witnesses and reading,” Gilbert says. “I was a
raw recruit.” But he had a politician’s instinct, which he was to turn to great
advantage for IFSA in later years.

Perhaps aided by his subsequent role, in
1994, as secretary of the Senate Inquiry into Print Media, Gilbert always
played a lot of attention to the media. He measures the column inches devoted
to IFSA views and he measures journalists’ opinions about the association and
the industry. He then joined the industry proper, running the funds management
arm of CUSCAL, before moving back into more of a mediator’s role at IFA. But
even though he is not going to retire, and will likely take a new role in a
services firm dealing with, rather than within, the funds management industry, Gilbert
will be well remembered for his time at the helm of IFSA.

He hopes that his
successor, former NSW Liberal leader John Brogden, oversees another strong
growth period for the IFSA members. The markets may dictate whether that comes
true. Brogden said last month that superannuation adequacy would be high on the
advocacy agenda, and echoed the Association’s long-held call for compulsory contributions
to rise to 12 per cent. Among the highlights for Gilbert are battles won: the
Managed Investments Act, fought and won against the trustee companies, some of
which were also IFSA members; the introduction of FSR; a raft of tax reforms,
both domestic and international; super reforms under the former Government;
choice of fund, which improved the competitive position of many IFSA members; a
world-class dispute resolution system; and, even, the charter to phase out
commissions for financial planners.

The commission issue was not exactly a
battle won for IFSA, but at least the association was able to negotiate a peace
on its own terms. And it got in with its “charter” before the Financial Planning
Association proposals for its members to move to fee-for-service models, which
were announced a couple of weeks later. A politically astute move. Gilbert says
the charter is a massive win for consumers, addressing, at the same time, what
had become the biggest problem area for IFSA members. Aided by the new
Government, commissions for planners had become a position which was
increasingly difficult to defend. The IFSA board set up a committee, chaired by
Gilbert, to study the issue, with a deadline to deliver by June. “The charter
is a case of the committee system working well,” Gilbert says.

“We have very
rarely had any breakdowns in unity of opinion.” Under Gilbert IFSA also became much
more outward looking. It successfully lobbied the current Government when in
opposition to take notice of the export potential of Australia’s funds managers, with
Prime Minister Rudd continuing to take a personal interest. The Treasurer,
Chris Bowen, Gilbert says, also sees the industry as critically important. Gilbert
was the foundation chair of the International Investment Funds Association, for
its first three years, and hosted the annual conference in Sydney in 2007. “AMP, Vanguard, QIC and
others are doing business in Asia,” he says.

“Everyone’s
been savaged by the GFC … but when we come out of it we’ll have a very strong
base for growth.” Lowlights? Well, Gilbert is still smarting over long-standing
attempts to get the states to standardise stamp duty on life insurance
policies, without success. “The state governments need to pull their socks up,”
he says. “The prospect of life insurers having yearly visits from eight
regulatory authorities is a disgrace.” And the other lowlight is perhaps the
biggest failure of the funds management industry, around the world – not just
in Australia
– which is the failure to forecast the crisis, which has engulfed the world
over the past 18 months.

“The industry missed the GFC,” Gilbert says. “It was a
failure of the forecasters. I think the industry needs to do some navel gazing.
Instruments like the CDOs took everyone by surprise. The big companies need to
look at their risk management systems. And the economics profession, the market
economists worldwide, need to be a lot less focused on history and more focused
on the future.” Gilbert will attend his last IFSA conference as CEO, on the
Gold Coast from August 5-7, and while the mood will not be buoyant, it will not
be as glum as looked likely a few months ago. With more than 100 member
companies, and 40 supporting members, IFSA has cemented a strong position representing
a sophisticated growth industry.

 

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