Warrane College UNSW | college accommodation for students at UNSW
Warrane College UNSW | college accommodation for students at UNSW

Other people’s money – with Dr Michael E. Drew, consulting financial economist

Other people’s money – with Dr Michael E. Drew, consulting financial economist
On Wednesday 18 April 2018, it was Dr Michael Drew who came along to Warrane’s formal dinner with words of wisdom for the boys.  Director at Drew, Walk & Co., a boutique firm of consulting financial economists, Drew specialises in the areas of investment governance, pension plan design, and outcome-oriented investing.  He is also a Professor of Finance at Griffith University and his research has appeared in leading practitioner journals.

“I’m here to talk to you tonight about other people’s money,” Drew addressed the boys.  “I want to open with two important numbers … The first one is 10,000.  The Washington Post has recently reported that there are around 10,000 Americans retiring every day.  There is an incredible demographic change happening right before our eyes … The number that might interest you more is 30 trillion.  The financial news service, CNBC, has reported that there is some 30 trillion US dollars that has to be transferred from the baby boomers to beneficiaries over the next two decades.”
Drew told the boys that these two numbers were important: “The demography of ageing and other people’s money impacts every segment of society and will be present in all that you do in your future careers.”

Drew’s first professional job was in stockbroking.  From the very start of his career, he was working with other people’s money.  For him, the responsibilities of stewardship have been present ever since.

“When you are dealing with other people’s money you are a fiduciary – you hold a special relationship of trust and confidence with those you serve.  For me, being a fiduciary has been the most rewarding aspect of my professional life,” he said.

“Managing other people’s money constantly tests your ethical framework… Where do you stand on stewardship?  Have you even thought about how you might go about being a good steward? … How do you steward your personal finances?  You will be the steward of your career; your reputation; and your personal brand; these are lifetime commitments.” 
It would seem that living this stewardship has also given Drew the passion he has for some of the focus in his work – the ageing population.

An ageing population + money matters
Drew explained to the boys how gerontology (the scientific study of old age and the process of ageing) is showing how changing demography impacts households within the economy.  An ageing population isn’t a distant thing, its impacts are being felt daily: it means a struggle with productivity, and not enough people to replace the jobs that are being retired from.
The good news is that we live in a country where life expectancy is getting longer.  More than 80 years is the life expectancy for Australians and it seems that babies born these days might live well into their hundreds.  The bad news is that funding retirement gets harder, as there’s more of it to finance.  “There are important debates regarding inter-generational responsibility and the human dimensions of ageing, such as the scourge of elder abuse, that your generation will need to engage with,” said Drew.

“These are some of the challenges.  Let’s talk about some of the opportunities,” Drew went on.  “There are a lot of technologists in the room … We have a rapidly ageing labour force; exhibiting little productivity growth.  Surely you are the generation who can work with new technologies to meet these challenges.  So let’s make sure we’re encouraged and excited about the path that’s before us – how can we best embrace technology, create the jobs of the future and improve the productivity?”

In other words, an ageing population is also an opportunity: to use skills to think about solutions to problems (for example, embracing technologies that enable a better quality of life for the elderly – whether it be in their homes or in public spaces).

“The biggest influence in my life as a young person was my grandparents,” he told the boys.  “We need to challenge the negative stereotypes that society attaches to ageing.  This is a group of people who hold a store of wisdom that is as wide as it is deep.  It would be unwise for us as both individuals, and as a society, not to harness this most valuable resource.”

(Photographs from the evening are available here)