Former BlackRock MD Claire Finn on why asset managers need to hold on tight ahead of any impending economic downturn

Claire Finn has 20 years’ experience in financial services and asset management, most recently as a Managing Director at BlackRock. There she helped grow the asset manager’s UK Defined Contribution Pensions, Unit-Linked and Platforms business from $50 billion to $130 billion AUM over six years until 2017. Finn’s previous roles include Product Manager at Henderson Global Investors, where she was responsible for managing, developing and rationalising Henderson’s product range. She is now a Nurole-appointed Non-Executive Director for Artemis Fund Managers as well as at the Law Debenture Corporation plc.

Do you think traditional finance firms are fully responding to the tech start-ups marching in on their territory?

In some ways: there are plenty of robo advisors in the fintech space that are relevant to asset management, but so far they’re not really taking asset manager roles as the underlying investments still tend to be managed by traditional asset managers. The main response so far has been AM firms partnering with robo advisers, or taking stakes in robo advisory firms. Having said that, there’s lots of scope for improvement in the way that technology could be used to help more people invest and to do so with confidence. “The big challenge for someone to crack, I think, is getting individuals comfortable with investing. Robo advisers tend to struggle here: most people want some kind of human interaction. I think combining the human interaction side with technology is the key to success.

If you had to invest in a new financial business today, what kind of business would you go for?

One that really knows how to talk to customers! That’s what’s missing in finance: a firm that’s able to genuinely communicate very well with consumers, to give them confidence in understanding the proposition available, and to know what to expect from their investments. I don’t think there are very many businesses who are very good at talking to customers who are not used to investing already. I think Holly Mackay at Boring Money is doing it well, but - in keeping with her independent advice - she doesn’t haven’t an investment proposition. It’s a gap in the market.

What made you step down from a full-time executive career?

There was a restructure at BlackRock and my team was split into two, which forced me to rethink my life: I’d always planned a non-executive career but I thought I’d do it a bit later, perhaps five or ten years down the line. Originally, I started looking for another executive role in asset management, but Brexit meant there weren’t very many opportunities in the industry. And I wanted more work-life balance which is very challenging in full-time financial services roles, especially client-facing ones. So, after a period of time off with my family - I have a six-year-old daughter - I realised the benefits of a NED portfolio career.

What are the main risks facing investment boards?

It’s been Brexit for a while: Brexit has been a challenge for asset managers who didn’t already have a fund range or physical presence in Europe, and many have had to create a European fund range to continue to distribute. But a lot of that work has been done now, and regulation seems to be one of the biggest challenges for UK fund boards now. My board role at Artemis is one of the newly created roles under the FCA’s Asset Management Market Study remedies [the regulator now requires all UK open-ended funds to have at least two independent non-executive directors comprising at least 25% of the board]. One of the first very large pieces of work we’re doing as a board at Artemis is producing the assessment of value report for investors. It’s an interesting time to get started.

What’s your advice for those with finance backgrounds getting into NED or board roles?

One of the things I found incredibly helpful is being part of a network - I’m involved with the UK Fund Boards Council, which was established to help people enter the fund board space; in the investment trust world, the AIC similarly provides lots of background information and networking opportunities. In general, though, I think it’s all about researching, networking, and talking to people about their experiences and what firms are looking for, plus any opportunities they know of.

What type of talent do fund management boards need most?

In the investment trust space, I see lots of people from an investment background, either portfolio management or investment risk, but not very many on the marketing or sales side: I think that’s a gap on many boards. On fund boards, it’s more specific to the company: what background and skills do the executive team have and what complementary skill-sets can the non-execs bring.

How did found the Nurole experience?

Excellent. I’m unusual in that I found my first two NED roles through a recruiter - Nurole - rather than my network, and within about six months too. I’ve really enjoyed the experience of working with Nurole: the platform is really helpful in focusing your mind on whether you can add value to a board. It really makes you consider hard whether your key skills match what the firm is looking for. Nurole also provides feedback if you’re not successful at getting through to interview, or at the interview itself, which other recruiters in the non-exec space frequently don’t. It really helps you to do better next time.

Can the City ever reverse its post-crisis reputation?

I hope so, but it’s still a work in progress. It’s not too dissimilar to politicians... You have to win over people’s trust again, and you do so by acting in their best interests (not your own!) and showing you have learnt lessons from the past. The financial services industry has gone some way to do this, but there’s more work to do.

What’s the next crisis to hit the asset management industry?

Probably the next big market downturn. I think it could be even more painful than usual for asset managers. Firstly, central banks have very limited firepower to boost economies because interest rates are already so low, so the downturn could be prolonged. Secondly, fees and margins are already under pressure and asset managers are feeling the pinch now, despite a 10-year bull market. When asset values fall, as they inevitably will, that revenue pressure will be felt even more keenly.

And now for some quick-fire questions…

What’s the best professional advice you’ve ever received?

You don't always have to hire people to get ambitious projects off the ground. Focus on influencing people and leveraging resources across the firm.

What was your biggest break?

The restructure [at BlackRock] that gave me the headspace to really think about what I wanted to do next and what was important to me.

Favourite book?

Paula by Isabel Allende.

Favourite quote?

‘Happiness is not something ready-made. It comes from your own actions.’ – The Dalai Lama.

Favourite holiday?

Pre-motherhood it was trekking in Argentina, now it's Disney!

What do you do to have fun?

Yoga, holidays, ice-skating with my daughter.

Favourite app?

Waze - I love that it tells me when to leave to get places on time.

When does your alarm go off and how many hours of sleep do you have on average?

It's now 7am and 8 hours... a vast improvement on my exec lifestyle!

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