Helen Thomas, CFA, has had a varied career in both the City and in Westminster. She talks to Professional Investor about the importance of political risk, her company BlondeMoney, and why we are in the Technological Revolution.
PI: You’ve had a such a varied and interesting career in financial services, working with banks, fund managers, and hedge funds. And you also have political experience, serving as an advisor to George Osborne when he was Chancellor of the Exchequer. So tell us why you decided to launch BlondeMoney, and a bit about it?
I always felt that financial services rewarded those who became very focused specialists, and unlike in Adam Smith’s pin factory, I didn’t want to take that path. After almost twenty years, I decided the best way to incorporate all of my skills and interests would be to launch my own firm. BlondeMoney looks at the unquantifiable unpriced risks: we scan the horizon for the icebergs that can’t be picked up by those hyper-specialised financial risk management radar systems! The biggest one of these is political risk. I can remember being on a conference call for the global investment team a week before the Brexit referendum, and it just wasn’t considered possible that “Leave” might win. It was then that I realised our industry needed an independent voice that could analyse these unexpected events. Our team is unique in combining our knowledge of both Westminster and Wall Street.
PI: It’s still rare to come across investment professionals with political expertise. Do you think the investment industry needs more political analysts?
Yes. I must admit that when I went into my first role as a graduate trainee at Merrill Lynch, my Politics, Philosophy and Economics degree didn’t look anywhere near as useful as those with physics or computer science backgrounds. Quantification of everything was key. That started to change of course, after the financial crisis, when the limitations of a purely quantitative approach became so apparent. I always remember the comment by the CFO of Goldman Sachs in 2008, that it was a “one in six sigma event”. Before the infection of our financial system with pure mathematical theory, he would have just said that it was a “once in a blue moon” event. That period should have set the alarm bells ringing for everyone managing an investment portfolio. The risks and potential return streams aren’t always visible in plain sight. Political risk is the ultimate expression of what Donald Rumsfeld beautifully described as the “unknown unknowns”. That’s because politics is all about people, and people, as we all know, are highly unpredictable!
PI: How important is it to have access to insightful and objective commentary in this era of information overload and fake news?
Time and again I hear from our clients how much they thirst for information they can rely on. In the last few years, with the explosion of social media like Twitter, we have become overloaded. Everyone needs a trustworthy filter. That’s why BlondeMoney deliberately produces short, bullet-point notes, or data expressed in just one or two graphs, because we know that’s how we like to receive our news.
PI: You’re an active member of the Society, and have engaged in many committees over the years, most recently looking at ‘Value in the Investment Profession’. Do investment professionals need to articulate the value they provide to Society in a more meaningful way, and if so, how do they go about it?
I was very proud to be involved in running the implementation of The Value In the Investment Profession project. Not only did that report provide a clear and honest look at where we can improve our profession, but it went on to form the basis of our working groups, who then put together practical methods for how we can make a change. I’m passionate about changing the culture of our industry so that we recognise our failings and strive constantly to do better for the fiduciary duty we bear to our clients, not to mention the responsibilities we owe to the wider society. For anyone reading this who feels the same, I encourage you to contact CFA UK to offer your help as a volunteer in the future “Value of the Investment Profession” projects. Even if you think you might struggle to offer the time to do that, remember that we all represent our profession at all times. Being a Charterholder gives us a level of professionalism that many parts of the financial services industry struggle to demonstrate. The Ethics portion of the Body of Knowledge is of great value and importance to all of us and we should reflect its lessons in our behaviour.
PI: What are the biggest trends and themes that will shape the future of asset management over the coming decades?
Technology is disrupting every industry. When historians look back on this period, it will be a Technological Revolution, just like the Industrial Revolution was. And just as that revolution entirely changed the way industries operated, I foresee the same thing for asset management. Too much of asset management is clunky, bureaucratic and administrative. Blockchain could change this completely, for instance. I wonder sometimes why Elon Musk bothers about going to Mars – if he just opened a new asset manager, employing a few coding experts who focused on making our business more secure and efficient, he could capture the market in a matter of months! Just look at what Revolut is doing to FX transactions, or Monzo for banking.
PI: What is the one piece of advice you would give investment professionals who are just starting their careers?
You are joining this industry at a time when it has never been more in need of reform. Better technology, yes. But also a better culture. You can change this. You are the future CEOs and you will mould this industry into your own image. So don’t let anything knock you down or make you cynical; instead, use any frustration to make as much of a difference as you can. (BlondeMoney runs a mentoring scheme if you would like further advice than just this!)
PI: What keeps you up at night?
Fear of missed opportunities. Carpe Diem is my motto!
PI: Something we don’t know about you?
I once took Michael Jackson style dance classes and perform a mean “Smooth Criminal”.