As Covid recedes, investment industry faces challenges in markets and people

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Boyle and others were at the Investment Funds Institute of Canada’s (IFIC) Operations Day event in Toronto to examine what’s happening in the investment industry – from a volatile investment environment to a aging demographics to efforts to attract employees to the office.

Decades-high inflation and rising interest rates have investors looking for different kinds of solutions, he said. For starters, many investors who abandoned GICs years or even decades ago are coming back as sales of products with comparable returns suffer.

“We’ve all benefited from a beta tailwind over the past 30 years due to a falling rate structure,” Boyle said.

“I think the industry is going to have to come up with solutions that will deliver that consistent income to investors with less volatility.”

Private investments will likely play a much larger role on the retail side, he said, which will also add a lot of complexity to client portfolios.

Oricia Smith, president of SLGI Asset Management Inc. and senior vice president of investment solutions at Sun Life Canada, said changing demographics will also alter clients’ investment needs.

An aging population will focus more on retirement income, she said, forcing advisers to adapt, and the pandemic has led to a greater focus on financial planning and holistic advice.

“Talking about wealth and health together is important right now,” she said at the event.

With changing demographics leading to more assets controlled by women, Smith said the industry also needs to do a better job of recruiting women. The proportion of female councilors has been stuck around 18% for some time, she said, suggesting a structural problem.

At IFIC’s first in-person event in two years (there was also a livestream option), plans to return to the office were naturally part of the conversation.

Boyle said Mackenzie’s office was about 30% occupied. While hybrid work is here to stay, he said it’s important to meet face-to-face, especially at a higher level where you’re dealing with big issues.

Virtual work allows people to become “desensitized,” he said, and “constructive tensions” to turn into less constructive tensions. Spending time together socially can help mend relationships that may have taken a “bruise” from working remotely.

But attracting workers, especially younger ones, has been a challenge, especially since some have never worked in the office.

Smith said it’s important to organize office time so people don’t show up and spend all day at their desks on Zoom calls.

Companies use lunches and guest speakers to keep workers coming back, hoping that once in the office, they’ll feel energized and want to come back.

Boyle said it might take a few tries. As with exercise, the first few times can feel awful. (“I’ve never exercised in my life, says Boyle, but I know people who have.”) He encourages employees not to give up just yet. Once they get used to using those muscles again, they will start to see the benefits.

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