At the time that you picked out, Greg, which is County NatWest’s, I guess, ‘glory’ days of the late ’80s and early ’90s – we’re talking about the period leading up to and immediately after the 1987 crash – I would say to you that the Australian market was absolutely manufacturer-dominated. I strongly dispute that County didn’t make money. I think it made a great deal of money. I would say to you that the margins were significant, but a Don Argus would say, ‘Yeah, but your cost to income ratio was way too high’. We used to say ‘we’re special, we don’t need to worry about costings’. That was the problem in a manufacturer- dominated business, that people who ran it really just looked at what they needed. And when you’re manufacturer-dominated you tend not to think about your customers, and certainly not your end customers, in quite the way that you needed to.

And so what was built was a hotch-potch of record-keeping systems. There was no thought that it might need to interface into a dozen other systems, and anyway, the technology didn’t exist. So even if they’d wanted to build it in, the sorts of integrations that they built were pretty ugly and pretty clumsy. And we still see that today in things like HiPortfolio, and indeed, in most of the unit registry systems that are in place. So what did fund managers need to do? They needed to insure that they had integrity and security and compliance in their back offices, although to a far less degree than they need to today. They didn’t worry too much about any access. There was no such thing as the internet. I don’t think that the fund managers ever really understood that efficiency would become critical to price. And I don’t think that fund managers have ever really seriously competed on cost efficiency grounds in this country.

They competed on product. That’s a really important point to understand, because then what the fund managers are concerned to do, competing on product, is make sure that you’re differentiated in your product capability, which means you want lots of different little things that you can offer. You make sure that nothing goes wrong in your record keeping and admin, but you don’t worry too much in the end about the end investor, provided you’re giving them a fairly expensively managed product service. We’re living with multiple sets of unit registry systems that are incredibly inefficient, not just because they’re pre-internet, and not just because they don’t communicate particularly well, but because they have very little capability of delivering data out to the multiple places they need to go, including most importantly, to the client on demand in real time. Tim Worner: Chris, didn’t the wraps change the dynamic as well? Because now it’s not that important. The primary record keeping function is with the wraps and master trusts. Chris Bain: Yes, that is true, Tim, and that was part of a shift where distribution really grew and the power of the platforms themselves changed.