2019 CEO Survey: Renato Mota, IOOF

IOOF CEO Renato Mota. Picture: Aaron Francis

Every year The Australian’s John Durie asks some of the biggest names in Australian business five key questions about what’s coming in the year ahead.

Here, in his own words, is what IOOF’s Renato Mota sees ahead in 2020.

Read more from the CEO Survey.

How is your company affected by low-interest rates and what is needed to boost the economy?

Low-interest rates are having a significant impact on the lives of self-funded retirees, making generating income for day-to-day living far more complex than before. Low rates are increasing the demand for affordable and reliable financial advice and reinforcing the value of high-quality professional assistance. From the perspective of boosting the economy, it is time for longer-term thinking on policy and macroeconomic reforms that increase productivity as our population ages and our tax revenue base shrinks.

What is the impact of government regulations on your company, including those applying to the financial sector?

The current changes in the regulatory environment are having a significant impact on financial services and, as the Hayne royal commission highlighted, a necessary one. There is a significant amount of effort going into the design and implementation of new regulation.

While this demands significant investment in governance, I firmly believe that IOOF, the industry and the community will benefit for years to come. IOOF response has been to strengthen our governance and change our structures to be more reflective of an organisation that puts its clients first, eliminates conflicts of interest and exceeds, not just meets, regulator and public expectations.

What percentage of company revenues are spent on research and development, and how is your company using technology to improve performance?

The investment IOOF makes in R&D is significant. We’re making our products and processes simpler. Over the past ten years, we have consolidated from eight platforms to two. They will be further simplified by 2021, for the benefit of clients to a single modern, flexible platform delivering market-leading functionality and costs to serve. We are also investing in technology to make it simple and easy for clients to manage their money better.

We recently launched Fincentral, an online budgeting app providing clients with a complete view of their net worth, with the ability to set financial goals and track progress in achieving them. Equally important is our investment in people – especially in high-quality advisers – and innovations in the provision of quality advice. We established the IOOF Advice Academy, a coaching and training program for financial advisers to support them in delivering better client outcomes – day-in, day-out.

What are the three major policy issues facing the country and what should be done about them?

● We need to restore public trust in public institutions and business. Politics, the media and financial services all face this problem, and there is no silver bullet. We need a genuine and enduring re-setting of relationships between institutions and the public.

● We must return Australia to economic growth and boost our productivity to meet the challenges of an ageing population. We must be less reliant on old models of building financial security and wind back the high levels of household debt.

● Harnessing innovation and digital disruption in ways that improve lives and bring businesses like ours closer to our clients is mandatory. In financial services, we are managing an increasing regulatory burden for which the sector must accept much of the blame. The challenge is to use regulations and digital technology to be closer to our communities, rather than a barrier.

What are the major impediments to long-term growth facing your company and what can or is being done about them?

I believe the demand for high quality, customer-led wealth management advice is growing. The ageing of our population makes it critical that we re-imagine how we provide for that changing demographic. Advice can come in many forms and pricing levels. We need to embrace this change and see it from the client perspective. Against this backdrop of growth is lower margins, which while delivering more value to clients, it reinforces the need for business to challenge itself to new ways servicing clients and delivering value. We also need to boost measures that improve societal inclusion and minimise the widening of the wealth gap in Australia. IOOF was founded more than 170 years ago to serve the community, particularly people who were most vulnerable. I passionately believe that the organisation’s purpose and obligations to the community are as relevant today as they were then.