Pedalling FINANCE

Gary Harvey, CEO of advice and investment management group, ipac, is all about the long road, both in financial planning and endurance cycling. Interview by PETER MYERS

WITH 20 YEARS OF EXPERIENCE IN the financial services industry – which came after eight years in the wine industry – Gary Harvey has worked in the UK, Australia and Singapore, and today runs ipac wealth management Asia, a member of the Global AXA Group and a CWT client. ipac helps clients achieve their financial and lifestyle goals, and has managed more than US$13 billion for individuals and institutions since 1983. Twenty years later, ipac launched its businesses in Singapore, Hong Kong, Taiwan and South Africa.

When I met Gary he was gearing up for a monster charity cycle journey that is set to take him from Perth across to Sydney and then down to Melbourne in late September. That’s 5,500km in 22 days. He is hoping to raise a lot of money and awareness for The Smith Family’s Learning For Life, an educational-support programme with which both he and ipac have been involved for the last 10 years. “One in seven Australian children comes from a background where neither parent is working,” he tells me. “For a first-world country that’s a high percentage. Education is something I care strongly about, and so it gets me through the sheer distances involved.”

There’s a strong link between financial disadvantage and ipac’s work – helping people become financially independent through strategic budgeting. Gary explains: “If a family is struggling to make ends meet, they may not realise that if they’re more careful with their budgeting, they could solve some of their problems. Unfortunately, they can’t afford to get advice. We’re doing some research in this area to see how we can help these people.”

Describe your typical working day
It’s quite varied, dominated by me seeing and meeting people, chairing internal meetings, representing our business to our board of directors. It could be anything from performance reporting, to new business opportunities, to designing, building and executing strategy. I take managing and building talent very seriously. Like every company, we’re a people business, and without quality people – understanding their development plans as good successors for others in the business – you haven’t got a sustainable business. I also spend time understanding what’s happening with consumers; what their attitudes are, what their challenges are. And the challenges we face in wanting to deliver our value propositions to them. The only constant in my day is that it starts from around 7.30am, after a 5am cycle ride or early gym session. And it ends at around 7pm. I catch up on sleep on the weekend.

Does ipac have a magic formula?
Seeing what our clients actually want out of life. Too many people approach financial planning issues from the point of view of what return can they get. That’s the wrong question. The real question is do you want to be financially independent at 40, or do you want to work until you’re 80? So the questions we ask our clients are quite similar, but the solutions are very personal. It starts with the person, not with the money. The latter approach tends to take people down the path of fear or greed. In the current market environment, people are either fearful or greedy. The fearful haven’t gone into markets, and yet markets have moved 30% in the last two months – in any other year this would be heralded as an amazing return. We try and set a context.

If your core concern in life is to prepare for retirement and you’re 35 to 40 years old, then what happens this year in the stock market is irrelevant; what it’s going to do in the next 30 years is important.

How has business been affected by the downturn?
We are a growth business; we needed to make some small adjustments given that the level of growth and the level of assets we look after for our clients had gone down. Our business is heavily linked to the value of our clients’ assets.

In the past year, we’ve seen things like Lehman bonds and Pinnacle Notes falling over and causing clients a lot of distress. One of the outcomes has been an increase in Asian consumers needing advice. I think in the past there’s been more of a feeling that you don’t need advice, just a financial product. And if the product offers a return, then you believe you’ll get that return. I think that myth has now been shattered. We have seen the benefit of an advice model that anchors what people do to what they want in life. Our measure of client loyalty is our redemption rate: the number of dollars that go out of our funds as a percentage of the amount of funds that we have. Across Asia this is running at between five and 10% and that’s low according to industry standards.

How do you attract clients?
We have an active seminar approach and media strategy. We find that there’s a strong desire for people to be educated.

We target different issues; it might be children’s education, or women and finance [teaching women about financial literacy and financial independence, etc].

What do you most enjoy about working in Asia?
It’s a growth market with a can-do attitude and things get done here. It’s all about working out what the opportunities are, rather than why you shouldn’t do things. I feel privileged to be living and working in markets that have a growth potential which more mature markets just don’t have.

What are the most important things to bear in mind when travelling?
Organisation. Things can go wrong. Do you know where your documents are at home? If you’ve lost your baggage and phone up your spouse to check your travel policy, do they know where to look? We also find that a lot of people haven’t seriously considered wills. Expatriates should consider guardianship of children; local laws might prevail if there is no clear direction to the contrary. Do you have the right levels of insurance coverage, from losing your iPod to life insurance?

To sponsor Gary and help The Smith Family please visit www.aroundthebayfundraising.com. au/?GaryHarvey

Travel Light

Favourite away-from-home tunes?
It depends what I’m doing; on the plane I listen to Bach’s suites for the violin or unaccompanied cello – someone once told me that Baroque music helps the brain’s pathways. I also listen to a lot of lounge music. In the gym, it has to be something loud and pumping.

Essential carry-on items?
My gym kit. I try and make an effort to build a morning gym session into my routine when away. I’m a member of Fitness First in Singapore and they have an international passport system; when I travel I look for where their gyms are.

Best and worst travel experience?
The funniest experience was on a direct flight from Heathrow to Cape Town. There was a flight leaving for Johannesburg at the same time, but that aircraft had a technical fault. They merged the two flights, so we would have to fly to Jo’burg then on to Cape Town. To try and avert this, a group of business-class passengers actually blocked the doors to prevent the other passengers from boarding. A British policeman had to come down and clear the passengers away.

Most popular souvenirs you’ve brought back for the family?
I have a 17-year-old daughter, so the souvenirs I’m ordered to bring back must all be branded.

International or local newspaper?
Local paper in the hotel; Wall Street Journal Asia or the Financial Times on the plane. I listen to BBC World Service in the morning – I find it better balanced than the TV news.

Fine wine or local brew?
I love wine because it’s my background, but I don’t drink too much when I travel. I’m quite weight conscious, and alcohol’s a good way to put weight on – and stopping you from getting up at 6am to go to the gym.

Corporate entertainment or 6am jog?
Both; but not one to the exclusion of the other.