Investment industry

Meet a renowned investment strategist – Andrew Milligan

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Who is the real person wearing the accomplished investment strategist hat? He has many achievements, the odd regret, and fascinating thoughts on the challenges and opportunities facing advisers. Andrew Milligan, Head of Global Strategy at Standard Life Investments, gives an inspiring and honest interview.

Andrew Milligan
Andrew Milligan is Head of Global Strategy at Standard Life Investments

What’s your favourite quote?

I was impressed by this quote, from an Indian businessman from memory, which I read in a magazine a few years back. Apologies if it sounds very prosaic: “the first 25 years of your life are for learning, the next 25 years are for working, and the next 25 years are for giving back”. Standard Life Investments has been very considerate in allowing me to work for a range of outside organisations – charities, public sector, university – in recent years. I hope that the skills I learned have been helpful in the work environment.

Which investment decision are you most proud of?

Starting pension plans for my children as soon as they were born. Einstein supposedly said that “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” Even if Einstein didn’t, then it is certainly the case that regular payments while they are children should set them off on a good path for later life.

Do you have any investment regrets?

Of course! We learn from the ever surprising financial markets every day of our lives. An obvious personal example was not selling out of all my bank shares once the financial crisis of 2007-08 became clear – I thought that the outcome would be bad but not that bad! Another lesson learned from hard experience is: once you have made your analysis, then act quickly and decisively when making an investment decision – markets move faster and further than many people realise.

What do you see as the biggest challenges for investors and advisers in the next few years?

Some of the challenges will be different, some similar. For example it will be fascinating to see how far and how fast robo-advising can develop. If computer programmes can beat humans at Chess and Go, can they provide advisory solutions for many people with simple financial needs? Conversely, will investors be happy to get advice based on machine learning and algorithms? Otherwise, an important challenge will be remaining flexible when investing. Financial markets are trying to price in today what the future holds tomorrow. I attended an FCA conference recently which discussed a very wide array of scenarios over the coming 15 years: climate change and political or geopolitical stress, a unified Europe or a break up, inflation or deflation, dramatic scientific change or stagnation. The implications are very different for the global and individual economies, let alone companies.

What do you see as the biggest opportunities for investors and advisers in the next few years?

The biggest opportunity for investors is the ability to invest very cheaply in an amazingly wide array of vehicles in so many countries around the world. The ability to put together a portfolio which should meet the investor’s needs has never been better. Institutional, even retail, investors can access asset classes with very different risk premia. So the DIY investor is well placed, to the detriment of advisers. The good news for advisers though is that this broad opportunity set encourages the provision of sensible advice. The choice of an investment vehicle, active or passive, a fund or an ETF, or an investment trust or an option, matters less than the active decision about what to buy, when, for what purpose, for how long.

In a complicated political, economic, environmental, regulatory world, the willingness, even the need, to buy expert advice grows apace"

Who is the most inspiring person you’ve ever met and why?

I have been very fortunate to meet a number of inspiring people in my life, and I would not like to single any one of them out. The love of learning from my Latin teacher, an ability to relax in times of stress from one of my first managers, the use of rhetoric and emotion from Bill Clinton, an understanding of realpolitik from Henry Kissinger, a sense of perspective from Pope Francis, the ability to overcome discrimination from Condoleeza Rice, and perhaps an answer to your question – pure courage from Neil Armstrong.

Outside of investments, what’s your dream job?

I would love to be a film director or the producer of a play. The idea of taking a concept through from an initial idea to actual fruition is one that appeals. The closest I have got was directing the Nativity plays at church – but as they say “never act with children or animals”!