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Brendon Vade
Well, good morning, everybody. And welcome to the fourth and final episode in our series focusing on all things investment committees. I am joined here by Gareth de Maid from Blue Rock, and we have Jacquie Fernley again from Mason Stevens. Welcome back.

Jacqueline Fernley
Thanks, Brendon.

Gareth de Maid
Thanks, Brendon.

Brendon Vade
And Gareth, since we’ve already heard from Jacquie before in episode one, love to start with you if we can. And would you mind just giving us a quick little intro to yourself and your practice?

Gareth de Maid
Yeah, sure. So I’m an investment Director here at Blue Rock. We’re sort of a multi effective professional services business that focuses on not just the wealth management piece, portfolio management and financial advice, but we also do legal accounting, digital, philanthropy, and a multitude of other professional services that obviously bolt into a busy person’s life. So we look after the life and the business of people at the

Brendon Vade
end of the day. Excellent. And tell me, how did you how did you get started? Did you come from the wealth management side initially? Or did you have training and background in another part? Before looking after clients?

Gareth de Maid
Yes, I’ve worked for family offices, broking firms, and private banks. And it’s been a really good fit. For me. We’re a fast growing firm, with a real focus on the client’s change and innovation. And that, like I say, that’s, that’s really important for me moving forward, particularly as, as the nature of financial services changes over time, and how we’re able to serve clients. So as a dynamic workplace, that’s able to challenge and innovate. That’s pretty rewarding for for not only me, but for my staff and for Oct clients as well.

Brendon Vade
Excellent. Excellent. And tell me can you give me a little bit of a flavor of how many roughly how many clients that look after how many staff you have? And we look at it? Yeah, sure.

Gareth de Maid
So we’re located in Melbourne, with three offices in Melbourne, have about 5000 clients throughout the whole of the Blue Rock network, through our private wealth and the investment services business. There’s about 550 600 clients. Excellent, great sized practice. Yeah.

Brendon Vade
And Jackie, welcome back. Is there anything that you’d like to add quickly? As we as we kick off this morning?

Jacqueline Fernley
Nothing specifically, Brendon, it’s good to be back, though.

Brendon Vade
Excellent. Well, look, we might just take it back to the beginning. As you know, today, we’re going to be looking at the Investment Committee side. And we’re going to have a focus on outsourcing within investment committees and thinking about the different roles. And we’ve already had a couple of discussions where a different guests have touched on how this works in their own experience. But maybe to start off with Gareth, can you tell us about how your investment committee started? Who was involved? How often did you meet? What was the catalyst for starting the Investment Committee to kick off with?

Gareth de Maid
Yeah, sure. So the private wealth business has been running now for about eight or 10 years. And the the way that Blue Rock creates its business model is we build the model first, and then we attract the clients to that, then we attract the clients to that model. So whilst we do have the ability to I guess, build the plane, while it’s flying, which a lot, which a lot of businesses have to do. And we typically build the structure, try and build best of breed and best practice, so that we have the government governance in place so and with an expectation that, you know, you build it, and they will come. So that’s typically how we’ve how we’ve operated in the past. As a result of that journey, three or four months ago, or three, four months ago, three or four years ago, but formalized investment committee was established prior to me joining Blue Rock have been going on for about two and a half years. We’ve had some external relationships, some information that was provided by third parties, but predominantly, it was run by internal staff and staff members. One of the issues that we identified with that structure was that there could possibly be a tendency towards brute thick. And then obviously, you’re working with the peers, you might be working with someone that you report to, there can be unspoken hierarchies as a result of those relationships between staff. As a business, we spend a lot of time looking at that structure, and in a way of us improving it, improving the due diligence, improving the governance, and also having a degree of independence. Now to be very careful when I say independence as it relates to financial advice, obviously, but a degree of independence for both research, governance, and really key decision making. We identified that we needed some assistance with that to really build a best of breed. Excellent.

Brendon Vade
So yeah, and I think most people can relate to that. The As if they were sitting in amongst with their peers trying to make decisions about, say whether a fund is included or excluded, it might be difficult for someone who is going to be reporting to their boss and say, No, I think your idea is terrible, right? Like that’s, that’s not going to get a lot of traction.

Gareth de Maid
And look, I’ve worked for businesses that are really small, right? You know, they’ve had three or four people good funds under management, the Investment Committee, and I’ll have to put that in inverted commas. Investment Committee function was, you know, people sitting around having coffee, deciding on the portfolios and fairly informal structure. And then I’ve also worked for large organizations where it’s quite institutional, but at the end of the day, everybody’s an employee of the head company. So there is a tendency towards groupthink. What we wanted was we wanted the dynamism of a forward thinking business, but also having a degree of rigor and institutional grade compliance and due diligence around everything that we do. Absolutely. Absolutely. And, Jackie, I

Brendon Vade
think we reflected on this a little bit in the first episode. This is sounding like what you commonly experienced when you come into an investment committee. Is this the similar look and feel of where you generally start?

Jacqueline Fernley
Oh, absolutely, there’s, there’s no doubt that the first iteration is never the last iteration of an investment committee. There’s always the typical learning curve. And Blue Rocks in investment committee and structured process has really grown up over those over the last three or four years. And it’s not to say it was there was anything wrong with it. In the beginning, it was right for the business at that point in time, despite your Blue Rocks growing rapidly. And the more it grows, the importance is that it’s really important that your investment committee in your structure in your governance, and everything else grows up with it. And they’ve done a really good job of developing that over time. And what what we have now, collectively, because I work really closely with Gareth, on a day to day basis, I think is absolutely a best of breed, investment governance structure and Investment Committee framework that we work to.

Brendon Vade
Yeah, excellent. So I’m keen to dive into that in a bit more detail and help to unpack, you know, what that development specifically has looked like, because I suspect that for a lot of listeners, either they don’t have an investment committee set up at this point, and something they’re exploring or thinking about, or it might be, you know, like you said, for Gareth, you know, a quarterly commitment to sit around and have a coffee and shoot the breeze about a portfolio and tick that box and move on. So I’m keen to, I’m keen to hear a little bit more about those first steps that you took. So it sounds like and tell me if I’m wrong. The investment committee started initially, entirely in house, what was the first step that you took to build out that governance? Where did you start?

Gareth de Maid
So, you know, we had we had source documents, we had philosophy, we had governing rules of all the portfolios, we have all those things that are really important when you’re when you’re constructing a sophisticated business. And where did you

Brendon Vade
get those from? Sorry, Garrett, just quickly, does that all week by yourself? Or,

Gareth de Maid
yep, we created those. So it built the philosophy of how Blue Rock sees funds management, and that, that leverage the experience of the individuals who created those who created the business in the first place. And we had external, we had external members of the Investment Committee who gave us who gave us advice as well. But we felt that it was really important for the business, because we’d been doing it for four or five years, like it’s maybe slightly shorter under that structure to go back to the source code, and ask ourselves, were the district the core decisions about portfolio construction, governance, the types of people that were engaging to help help us were they all in line and, and assisting us to achieve the best risk adjusted returns for clients? So and people probably can’t see this now. But Jackie’s smiling because we know that we went all the way back to the original documents, you know, recasting re wording philosophies about every single individual portfolio, their relative benchmarks how they will constructed philosophical views in regards to certain asset classes, for instance, you know, what is what does fixed interest meaning? Does it mean? Does it mean bonds, does it does it mean? Does it mean mortgages? And then do we have the technical expertise in regards to these asset classes to form views in regards in regards to them? So, for instance, if we’re going to be invested in bonds are the Investment Committee in a position to be able to manage day to day positioning of average maturities on the curve, for instance, more would would be preferred to have a third party manager? Or indeed, do we form a view where we prefer to control the credit worthiness rather than the what rather than than duration on the curve. So, you know, it sounds like we really got into the weeds. And we did. And we, and we spent a lot of time working on it. But what it’s built is it’s built a really great platform for the portfolio and portfolios to move forward. And for the business to move forward on a on a risk adjusted basis, which was very important for us. That was that was a key part of the process for us.

Brendon Vade
Right. Okay. So it was a reflection, I think, Jackie, we might have spoken about this as well, about almost like an audit of the skill sets and the requirements that need to go into the decision making and making sure there’s a match there, whether internal or external. Is that? Is that roughly the process?

Jacqueline Fernley
Absolutely. And when I say we went into the weeds, I was smiling, because we went into the weeds. It was painstaking. It took quite a bit of time.

Brendon Vade
How much time are we talking here?

Jacqueline Fernley
Well, for me, because I did, quote, I did quite a lot of the heavy lifting around it, which is what we do, when we go into that environment and they and a wealth practicing engages with us is it becomes somewhat of a heavy front ended consultive process where we we will take our templated Investment Committee Charter and our templated investment governance framework and a suite of policies that we have the base level built. But then to finish them, that is the getting into the weeds. How do we want to think about this? How, where are our circles of competence in different asset classes, there’s a lot of questions that we take a wealth practice through. And then there’s a certain amount of navel gazing that occurs as a consequence of that, that the importance of it sounds a little bit painstaking. And that’s because it is. But we’re now in a position with the Investment Committee to go hang on a second. That’s not how this portfolio runs. That’s not how we’ve agreed this asset class will be structured, it really allows us to anchor to an agreed set of parameters and keeps us on track. And whilst I may be the chair, and it’s an I’m used to working with a wealth practice like this, everyone sitting around that table knows the rules of engagement, and they can all keep each other accountable to it. And this is about reducing mistakes. And so and keeping us all accountable to a framework that’s agreed. And it sounds like I’m being quite rigid and inflexible. It’s not it’s just it’s a focus on making sure we’ve got clear guardrails around the decisions we’re making.

Brendon Vade
Yeah, excellent. And it sounds like then that sort of first step, if I if I can call it that. Joining the IOC for Gareth, you’ve come in as as the outsourced CIO, the first thing that everybody needs to do is get their head around, you know, what are the what are the rules of the game here? What are we going to try and define a success? How are we going to track our progressing? All of those things? Is that just the very first big to do list? Before you go diving into fund manager selection, which I think is the impression that most people have an IC spends its day, that day scratching his chin over? But yeah, maybe be more robust than that. And, Gareth, what was that process like

Gareth de Maid
for you? Look, it was it was really good. Sometimes you get caught up in in your own business. And it’s difficult to take the time out to really pause, look at portfolio construction, look at the look at the way that you’re doing things for clients, again, particularly on a risk adjusted basis. But have that time put aside to go back to the source code, understand what we’re trying to achieve for clients, which we had a good grasp on, but to ask those questions again, and to build that robust framework has certainly set the business up for for a lot of success. I’m particularly mindful of the fact that you know, portfolio construction is easy 70% of the time. Because you know, there’s the old monkey with a dartboard when the markets going up. Everybody’s pretty happy about things and the conversation that the clients let’s face if you’re an advisor and you got positive number, and it’s tracking pretty well. You’re looking forward to those conversations and Ah, because you look at me, look at me, how great Am I, you know, come back, I’ll see you next year. But if we go through a challenging market environment, you have to justify the reasons that you talk and the steps that you took in order to protect the clients capital. You know, those are the challenging conversations where you want to be pointed, robust frameworks, do process, and well constructed portfolios to defend those conversations with clients, even if you’ve outperformed on a relative basis. So, for us, it’s as much about the normal operating pace as it is, you know, foreshadowing that at some point in the future, some of us are going to have, and some of the staff are going to have difficult conversations with disappointed clients. And this is all part of this structure.

Brendon Vade
Yeah. And, frankly, it also sounds like quite a quite a humbling experience. Because, you know, by definition, you’re bringing in someone else for perspective, which you have to admit you don’t have. And then you have to let them go through and point out all the things that you haven’t thought about. Yeah. And and, you know, pay for the pay for the pleasure of you know, somebody telling you that you might be wrong and a bunch of places to

Gareth de Maid
buy. But but looked at that’s part of the process. I mean, having an independent chair, and then an independent macro economic and investment team that also comes to us and being able to leverage off those relationships isn’t isn’t important. But But why we engage with both Mason Stevens and MST. We recognize that at the end of the day, we’re a small to medium size investment business. Now. We’re not a Goldman Sachs, we don’t have 30 analysts sitting there help assisting us, nor do we need 30 analysts sitting there to assist us. But but we need to have a robust framework in order to be able to support us. And to be able to, frankly, create that leverage, and that expertise on a relatively cost effective basis is was extremely important for

Brendon Vade
Blair. Yeah, absolutely. And, Jackie, I’m imagining that’s a similar set of priorities for others that you see as well.

Jacqueline Fernley
Absolutely. I’m just reflecting on a conversation I had with someone yesterday, who is in the early part of their journey. And you know, they’re they’re like a kid in a candy store in terms of the opportunity they see of getting the breadth of toolkit that their advice practice needs, at a really cost effective price versus if they built it in house. And if I just unpack that for a minute, when they work, and I think about what Blue Rocks done with the combination of both using Mason Stevens and MS tema que they have four or they have three no sorry, four, four individuals directly attached to their into their business, all with high caliber, long investment careers. And those four individuals are then also attached to a suite of other service providers. So for example, Hassan Tevye, who sits on the head Investment Committee of Blue Rock is the is the global strategist for MST marquee he’s worked around the globe. And and considered as an asset consultant, our Investment Strategist for some major investment banks. He brings a wealth of knowledge. They also have John Lockton, who is from sandstone, the sandstone, which is a component of MST Marquis, who accesses the breadth of MSPs direct equity analysts to support the direct equity selection across their business. They have Andrew ash who works within my team who’s 20 year veteran of managed fund selection. And they obviously have myself as well across the three investment committees. The cost associated with that light is not that significant, insofar and in comparison to the cost associated with trying to do anything like that internally. And I think the collective nature of the all those mines to get up will not only develop a really good suite of investment risk adjusted investment returns over time, but it also gives Blue Rock and ability to market that opportunity and bring a lot of credibility to the investment solution that they’re offering their clients. And they’re you know, Garrison and his team are able to, to look at that suite of experts and it’s a compelling case when they’re presenting that to the end clients.

Brendon Vade
Absolutely. Absolutely. I’d be keen if you can, Jackie maybe just to unpack the the efficiency and sort of economics I’d have that for us a little bit more, if you can, and conscious that yeah, we’ll, we’ll be having having listeners from a range of different practice background. But maybe, maybe we could start by saying, you know, when is the what’s the earliest that you could really consider having an outsourced CIO involved in your committee? Maybe the best way to measure that is funds under management within the practice. Presumably, if I only have $20 million of farm in a practice, I’m probably not ready for an outsourced CIO. Well, is there a rule of thumb there that you can sort of give some guidance around? See where that starts to really make a lot of sense?

Jacqueline Fernley
Sure. And you might be surprised at my answer to this. And because it can be quite a small number. So for us as as a business and Mason Stevens, remembering we are focused on managed account solutions. So we are talking, we work in partnership with our wealth practices to help them build their businesses in a scalable way, the economics of that managed to count, the reality is that there can be a fee and appropriate fee basis point fee, attached to the development of that managed account, which can then fund the costs associated with managing that capital. So we economically we can share the upside. And based on farm and grow with that client, so our costs are generally thumb fee. And we’ll spend a reasonable amount of time deciding which clients we will work with in that context, because we are essentially deciding is this wealth practice actually going to grow or not. And so we will allocate our resources accordingly. But it can be as a consequence, quite inexpensive. In the first instance, because we’re taking the view, will we get paid eventually, how and, and really, we’re backing different wealth practices to deliver over time. And therefore, the farm amount in the beginning can be quite small. So I don’t want to put an actual number on it, because it’s not as simple as that. But, you know, Blue Rock is growing pharma funds under management, aggressively, and they have been for multiple years. So we were very comfortable in partnering with Blue Rock within that structure, because they’ve proven themselves to be a robust, growing consistent wealth practice over many years. And then sort of building out the framework that we’ve now built with blue Rob. So just for everyone’s, for clarity, we have a head CO or an investment committee that has that sits at the top level, who is the primary responsible for all portfolio decisions. Outside of the direct equity decisions, and the high conviction list of APL, those two component parts are delegated to the manage funds selection committee that looks after the APL and high conviction list, and the direct equity committee that focuses on the internal equity portfolios. So we use John Lockton from MST on the direct equity portfolio committee. And we use Andrew ash from my business for Mason Stevens, in the manage funds selection. So we are able to also utilize MST in that construct. And in that instance, we are utilizing some of the brokerage that Blue Rock would generally spend to transact direct equity portfolios to pay for some of that support. So, what I’m presenting is a fairly economical way of actually bringing in high caliber investment professionals in a in a way where the costs grow with the business and at some point, Blue Rock will be big enough that they internalize potentially, or maybe they never will. But the point being is it isn’t as prohibitive, as you might think, from the outside.

Brendon Vade
Yeah. And I guess in many ways, that’s a direct parallel to how a lot of advisors think about their clients. Right? You know, we’re making an assessment assessment about who you bring on as a client and you know, what the costs are going to be involved. A lot of that’s got to do with the growth and the future complexity and how much you think you be able to be involved and add value to the family individually. It sounds very much like you’re taking the same view, but a bit across to a practice as a whole. Yes, yeah, excellent. And I think commercially as well there, there are other arrangements where other types of outsourcing can can go for a fixed fee where maybe that’s more challenging. Perhaps in the early days, if you’ve got a fixed annual fee for a certain amount of commitment, certain amount, per, per quarter, or whatever it is, that you’re asking for that outsource analyst or outsource CIO or outsource, whoever, whatever capacity to have them come in to the ICS. Is that fair?

Jacqueline Fernley
That’s right. And there is and I think we talked about this. On the first podcast, there is no doubt there’s a there’s an ecosystem around this industry, of asset consultants from fairly small organizations, and some of them are very good. But they obviously have one revenue line. And therefore, they need to ensure that they’ve got a minimum revenue attached to each client they take on, where I’m in an incredibly fortunate position sitting in Mason Stevens, where we have multiple revenue lines, and it’s a profitable growing business, we can cross subsidize the costs associated with providing the services in the in the near term. And that enables me to price pan back different wealth practices in restore.

Brendon Vade
Excellent. And, Gareth, I’d be curious to know, from your perspective, you know, there are different ways of outsourcing within an IOC, you know, you could have just decided to go and get someone to, you know, run a bunch of numbers and take on more of an analyst or research role. Why is it that you decided to start with outsourcing your CIO? What Why was that an important decision for you?

Gareth de Maid
Look, you’re right, we could have engaged an analyst in the business. And that would have worked really well from an analysis perspective, but wouldn’t have given us the governance and wouldn’t give us the ability to leverage off of off of third party firm, wouldn’t give us the ability to leverage off a whole bunch of experience probably would have cost us more money. And all we would have done was probably generate more groupthink in the business. So from from that perspective, and weighing all those things up, this was the best solution for us. Absolutely.

Brendon Vade
Jackie, are there any roles where you would not come in as a CIO to kick off with? Yes.

Jacqueline Fernley
And I giggled a little bit, you know, one of and Gareth’s heard me say this a couple of times, I think you absolutely need to have an alignment of investment philosophy. So for me personally, if the wealth practice wants to run sly conviction, fly octane portfolios in a wealth setting, then I’m not the right person to help them. That’s not how I think that’s not the way in which I invest. So when there’s a misalignment of investment philosophies, and thinking, I will be the first person to say, or let me attach you to this asset consultant, because you’re more likely to get on better. And then there’s just there is always culture. And whether that’s when you are hiring your own team members, or whether or not it it’s about who you want to work with, or the culture and a board may think of an investment committee like a board, it is the culture of that room and the dynamic of that room, you know, there needs to be a personality, and in an engagement on a personal level. So there are some people, I just don’t think I’m the right person to work with them. And again, I will attach them to an asset consultant, who I think is better placed to work with that individual or group of individuals. Or if I see, for example, a governance structure at the wealth practice that is fraught with danger, but they’re not prepared to call a spade a spade, and change it so that the room can speak freely. Again, I don’t want to really play in that sphere either. So I yeah, it just depends on a number of things. But you know, if I think I’m going to be successful with that wealth practice, then we will work with them. Otherwise, I’ll do what I can to attach them to someone who’s going to get a better outcome for them.

Brendon Vade
And I imagine that’s a fine line because You know, on one hand do Gareth has sort of said and I think others have to is the the benefit of having somebody independent is that you don’t want groupthink, you don’t want someone just to go and reiterate the decisions you were going to make anyway, was probably no value in that. But at the same time, they have to be changes that that everybody sees the logic in and is comfortable in, and can see that they’re being made for the right reasons. You know, that’s, that might not be entirely different to a entire misfit of philosophical alignment. So I imagine that some of it takes a little bit of time to tease out to make sure that you’re working with the right person. Is that Is that a fair comment? Yeah, absolutely.

Jacqueline Fernley
And then like any other scenario, there’s often red flags early that you can tell simple red flags where internal advice practices might say, Yeah, I definitely want you in the room, but you don’t get a vote. It’s like, okay, right. Now, can you walk me through that? Why? Sure. So my, my views not valid in your mind, it’s just interesting. There are flags, you can tell if that wealth practice is truly open to the journey or not. So you know, there might be some really big personalities. And we all know, there’s some really big personalities in this industry. Oh, yeah. Who will be loud and throw their weight around? Again, I’m not interested. This. So it just depends on the culture of that organization, and whether I truly think they’re ready for it.

Brendon Vade
Sure. I mean, I like the the analogy of the red flags and the things that we look out for again, I think most of us as advisors do that with clients as well. Watch out for the signals and behaviors and think that maybe that’s not going to be a good fit. Gareth, from your perspective, what were the green flags that made you think that? Yeah, I’m on the right track here? This is this is giving us value? What were the what were the light bulb moments where you realized, hey, we probably wouldn’t have done this on our own, or what we would have done wouldn’t have been to the same quality or level of excellence. Were there any examples that come to mind for you?

Gareth de Maid
Yeah, I’ll tell you what we were looking out for. We were fearful that through this journey, not only would would we get institutional level advice and due diligence, we’d become institutionalized. And the one thing that bluerock viously fights against, and if you jump on that website, you see the branding, you come into the office, you see how the staff holds themselves, we we definitely don’t want to become institutionalized. And so there was a concern that we drift towards becoming glorified Vanguard portfolios, at the end of the day, we’d lose the dynamism, you know, we’d lose the energy, we’d lose the ability to have highly considered views in regards to certain segments of the portfolios. That’s certainly what we didn’t want to achieve, by going back to the source material, and saying, Who are we what do we stand for, and agreeing on that, again, because they will, you know, 80% of 90%, but we didn’t chant, you know, this sounds like we’ve gone back and we’ve put it, we’ve put a line, a red line through everything, you know, we’ve become this institution, and we’d look like or portfolio says, look like mirrors of Vanguard and we’re in debt targeting, you know, there hasn’t been a good. And it’s because we went back to the, you know, the big green flags for me, were because it was so well considered, because we went back to the source code, then because we took the time. This enabled us to build portfolios, which reflect high quality governance, and what we stand for as a business. And then how we see our clientele and how our clients expect their portfolios to be dealt with, you know, the website and the branding, how we hold out cells in marketplace is highly energized, very differentiated. But at the end of the day, that’s very exciting. But we’re still custodians of our of our clients wealth. And we realize that’s an extremely important role to play. And by having some of those things that we have will did was challenged by independent chair challenged by MST you know, whether we agreed with all of them, you know, that didn’t occur, we’re still able to put our own stamp on portfolios and portfolio construction, because we are our own business. But we haven’t, we haven’t lost our identity. We haven’t lost our branding, where we stand in the marketplace as a result of this journey. And so for us, that was an extremely important part of the engagement. And to Jackie’s early point, you know, we’d been working with Jackie for 12 months prior to this to this journey that we went on and there was already an alignment views amongst the broader Investment Committee. So for us, it was an extension V judgment that we already had for had with Mason citizens rather, for other people, it might be challenging, right? You know, you come in people ask questions about your views. I think that’s a healthy exercise, and a blue rock with pretty used to it. I’ve got to say, everybody’s always asking question, why did you do it this way? Is there a better way of doing this? And we’ve identified that there is a better way of doing it. So we’ll go and do it. It’s, it’s pretty much as simple as that. Yeah.

Brendon Vade
Excellent. I’m conscious that there’s a real, how do I say this? There’s a balancing act there that we’ve touched on a few times here about who actually makes these decisions and the governance around them, to give us a flavor of where you’ve landed in where you are today. Why not always be the structure for all time, but you said that there’s an investment committee that sits across the top and has subcommittees, one for managed funds, one for direct equities? Jackie, you’ve touched on the members of those committees. Gareth, I’m assuming that in addition to yourself, there are other advisors within your practice, who also sit on that committee? Is that correct? Yes, that’s correct. Across all three committees, across all three, you know, like any good football team, you

Gareth de Maid
put your best foot forwards on the front line, and you put your best backline people on the back line, we’ve taken the people from our business who are best positioned to consider Australian equities in the Australian Equities community. I’m not, it’s not my specialization, I realized that I’d sit in that committee. I’ve probably been more down that the funds management path as a result of my experience, or I sit in it. Sure.

Brendon Vade
Sure. If just by by voting, and I hope I’m not asking too sensitive a question. But by voting power, if you know, if you wanted to disagree with with Jackie, as the as the CIO, is that something that you’re able to do? Or do you do have those set up in a way that it’s sort of 5050 vote? Who can overrule who, in what I would describe as a very advanced sort of governance structure like you have, who ultimately makes the call here? We’ve got it, we’ve got the chair, but then we also have other members, and we have presumably shared voting power. When it comes to crunch time. How does how does that actually

Gareth de Maid
was that actually work? Well, that was agreed in the source material when when we went back and rebuilt structure, frankly. And so at the moment, if there is an impasse or if we don’t reach quorum, then we’ve decided that the chair should have the casting vote. We’ve been running it for a few months. Now. We haven’t got to that. Yes. Because largely, I could say this, whilst there isn’t groupthink, there’s a broad alignment of views. So it’s a pretty easy structure to run the end of the day.

Brendon Vade
Anything you’d like to add to that checking,

Jacqueline Fernley
I just add to the comment Gareth made earlier, we have to remember that I had been working with the Blue Rock team for 12 months before we put this structure in place. They knew me, I knew that. And that that sort of would have, I’m assuming, and I don’t want to put words into God’s mouth that that probably gave them the confidence to actually give me that veto. Right, because they were looking for independence. And the reality is that they can shoot me at any time. And so and switch me out. But, you know, I can imagine that that isn’t necessarily the way other wealth practices who haven’t worked with their asset consultant, or their their outsourced CIO may not want to allocate that veto right? In the early days, and there’s no right or wrong, it’s just a function of four blue rocks at the time, winter, the mix of people and everything else, and what they’re trying to achieve. The goal was very clearly defined as best practice governance, and best practice governance is around having independence, as well. And that that was really clear as the directive. So that doesn’t necessarily mean that if you don’t have that, it’s bad governance. It’s just, it just depends on exactly what it is that you’re trying to achieve. And my my goal is to never be in a position where I need to use that veto. Right. Yeah, I

Brendon Vade
think it’s easy to imagine that there’s, you know, full blown conflict over whether or not a fund is included or the weight of a target asset allocation. But as you say, you know, hopefully those decisions and the groundwork has been made to lead up to something that is sensible enough for most people to agree with him most of the time. But even in the times, there’s not you have a sensible way of making those decisions and cutting through those disagreements. In a way that hopefully gives the best result for the client.

Jacqueline Fernley
That’s right. And the rest of the time, everyone has an equal vote. It’s not weighted by anything.

Brendon Vade
Very good. Very good. Um, Gareth, as we, as we bring things to a close here, really appreciate you sharing your journey and the different paths and ultimately where you’ve landed, which sounds, which sounds excellent. Is there any advice that you would give to your earlier self, when you were starting out on this this journey? If it

Gareth de Maid
was available? Why did we do it earlier? would be would be my advice. And to just ask the question about your business. Are you representing your clients in 100%? The best way that you could look, the service wasn’t available prior. And we had a quite a great framework. I don’t want to undersell this, you know, we had a properly defined Investment Committee external expertise. It was well considered, we always had the clients at the forefront of everything that we that we did. We had externals to help us with administration support, we, you know, we had a really robust framework. But we asked the question, again, is this the best structure for us and for our clients? Mason, Stevens approached us with a new structure that they were looking at this externalized CIO function, and we thought it was better than what we had. And so we went in. That’s great.

Brendon Vade
Jackie, would you I think I asked you this before, but I’m curious to see if you have a slightly different answer, reflecting on the conversation we’ve just had. What advice would you give to someone who’s starting out on this journey? Maybe someone take garrets example, who, who has a bit more of a structure already in place and wants to advance it maybe, to narrowed in a bit, we’ll go with that.

Jacqueline Fernley
I think the advice would be to just step back and find that time and bright mental energy brain space to sit back and really ask the question, is this structured in the best interests of my end client? Am I getting the right outcomes? Where am I holes? And even if you sit and whiteboard it and really think about, Do I have the right people in the room? Could I do this better? There’s not what stopping you picking up the phone, and just adding for half an hour and you spitballing with someone whether or not that’s someone from another wealth practice, or whether it’s calling into Mason Stevens, it doesn’t really matter. Just thinking about the current the continual evolution of can I do this better? Because no one ever is perfect. I’m sure we will continue to iterate Blue Rocks process. But that that’s that’s kind of the beauty of it, isn’t it? It’s just like always trying to want one step forward. That’s the growth mindset. And I just would encourage people just to sit back and reflect.

Brendon Vade
That’s excellent. Well, Jacquie, Gareth. Thank you so much for your time today. It’s been a pleasure talking to you and some great insights there, and we really appreciate it.

Jacqueline Fernley
Thanks, Brendon.

Gareth de Maid
Thanks, Brendon.



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