(upbeat music) Hello and welcome to the ASB Investment Podcast, the show that keeps you up to date on the markets and helps you make smart choices with your investments. These are entirely our own views and that of our guests. It's not investment advice, but we know plenty of experts at ASB, they will be happy to chat if you need. Well hello and welcome to another edition of the ASB Investment Podcast. I'm your host as always Nigel Grant. And today we have an extra special episode. We're joined by none other than Vittoria Short CEO of ASB and my employer. Our Vittoria thank you for sharing your insights and perspectives with us today. And for also joining me, allow me to do a media performance review live on here. Our listeners and customers are keen to understand your thinking. I'm sure I'm as well on the future of wealth in New Zealand. And we appreciate what I'm sure will be in open conversation. It's fantastic to have you on the show and so welcome. - It's great to finally get an invite to the show. - Thanks for that little subtle dig there. - Now apart from, it's so good to have you. Apart from running one of the largest organizations in New Zealand, what have you been up to? Is there any, I guess, you know, the listeners to get to know you a bit more as well. Family holidays, do you get any holidays as a CEO of ASB? - I mean, the best time to take holidays, it's really the Christmas break. Everyone in New Zealand's own holiday. - That's right, yeah. - We've got two kids in the States. So we are committed to Christmases in the US at the moment because they don't give any time off with their sport. - Also white Christmases. So white Christmases are our thing while they're studying. - Oh, fantastic. To help paint the picture of you as well, and we hear it work about talks you give in speeches and Friday wonderful emails as well that go out, is there anything I guess that shaped your view on finance and savings in your history? - Yes. My sort of thinking around the importance of finance and particularly as an enabler for your life really was shaped early on when I was very young. I was a dad, ran a small business and got into financial difficulty. And I was too young at the time to really understand much about all of that. But what I saw that definitely had an impact was the emotional toll it took on the family. And so when I was very young, I remembered being very interested in any information about how you could prevent that sort of financial impact. - True. - So, yeah. - Were you that way minded before that sort of moment was that the catalyst to kind of go like I like when off and like I've got to learn about this? - Yeah, definitely the catalyst. I share that I remember I saw something in the paper I'm going to say was like in the herald around financial independence. And there were words in there that I didn't understand at the time but they absolutely stuck in my head. And one of them was assets that if you could invest in assets and get a return that you could get this financial independence. And so I remember being asked what would I like for Christmas? And so my answer was assets. - Incredible answer. That's how love it. - I didn't really know what they were though but it was a thing. - Yeah. - That's a hell of a Christmas cracker, I guess joke. What do you want for Christmas? Let's with that, I guess background in mind, let's start with the first kind of area. I wanted to explore was your or the big picture view. From your seat, I guess you see a lot more than I would and you're talking to a lot more people from different walks of the bank areas. What does the future of wealth and investing or the financial health of New Zealand look like? Is there anything that you see evolving or where are currently things at or where they might be going? - I think let's just start with, what is the purpose of ASB? And we have always said that it's about progress for all New Zealanders. That's what we here to do. - Yeah. - And then the next thing is, well how do we do that? And what we do is we support Kiwi with all of the ways that they can invest and make progress. So whether that's deposits saving for a home, whether it's Kiwi saver investments or investing in your own business, we look after all of those ways that people can make progress. And that's at the heart of our strategy. - And are there any emerging, I guess, trends or challenges whether it's informing the ASB strategy or I guess investing whether it's businesses or individuals, anything that you think in your time in the CEO chair or that you've observed, is there anything happening now more that investors or businesses need to be mindful of? - Volatility, I think hands down if I think about the last five years, whether it's the way that we run ASB or whether it's what we see with our customers, it's how do you handle the volatility? We've seen the fastest increase in interest rates followed by the fastest decrease. - Yes. - It's been up and down really sharply. And markets have moved. We've been through COVID, inflation. So I think the really important thing is how do you stay the course through a very volatile period which, again, look at geopolitics at the moment, incredibly volatile? So how can you stay the course during periods like that? - And before I get into the next topic, I just want to, as our leader or one of the nation's most important leaders, how do you separate that signal from noise? Because I guess there must be so much potential noise that hits you every day. Whether you want it or not. Is there anything kind of you, like is it just more anchoring on having a great strategy and letting that cook, or is there really techniques you could impart? - So I think about one concept that is really important for the bank and I think it's really important for our customers. And really that concept is about resilience. So for the bank, we think about what are our settings so that we can be really resilient. - We're holding loads of capital, loads of liquidity, and it gives us the real confidence that we have got a bank that can see through all of the difficult times today, yesterday, and going forward. You know, it's one of the reasons why we're 178 years old. So resilient settings, I think are really important. And then it's the same thing in households. How can you make sure that you've got just a bit of money tucked away so that you can be resilient? Same thing with businesses. How do they think about their balance sheet settings? How do they think about their cash flow? It's the old adage, you know, prepare for the worst, high-speed best. With those settings comes some confidence. - Yeah, and I guess you naturally bring up 178 years. I guess if you have that, you're a custodian of a wonderful business for a small time, I guess, for a household. I'm the same. I'm a custodian, my family. I can imagine there's some lessons there for business owners and households alike. One of the other big things that's happening this year is obviously the election and the country's heading to the polls. So conversations about our collective financial future are going to be taking, you know, seeing a stage once again. There's always a lot of ideas and suggestions floated in years like this around whether it's housing savings, investments, retirement or infrastructure. And these can, you know, obviously not shape, shape not only individual prosperity, but also the well-being of, you know, and using them in our communities. Firstly, you know, and Kiwi Save has been coming up a little bit in the last couple of weeks with our sort of government or opposition pronouncements. Is there anything that comes to your moment? It comes to, I guess, with respect to Kiwi Save it and it's impact on building out that resilience potentially. Yeah, definitely. I think, no matter what, one of the best things anybody can do is put some money into Kiwi Save it. And there's loads of financial literacy about how important that is for every individual. Yeah. And so one of the really big topics that I hope gets a lot of discussion the selection and on a bipartisan basis is increasing our Kiwi Save contributions. Right. And I say by partisan, you know, we may not agree with some small details, but I think the direction of travel has to be focusing on Kiwi Save it as an enabler for everyone in the country. Kiwi Save is, you know, maybe 140, 150 billion depending on which way the win blows. But do you see it? I guess if you put, you know, a different head on like the business banking side of the bank, do you see Kiwi Save it forming an even bigger part to play in the NZ economy, not just for the Save it, but maybe for our businesses? That's right. I mean, there's a lot of talk around the emergence of superannuation in Australia. Yes. And the ability for superannuation to be able to deploy capital into the Australian marketplace. And so we can see, you know, when we look across the ditch that there are benefits to the Australian economy as a result of a very developed superannuation scheme. So that's certainly something that should be in our sights. Can't be a bad thing. I guess you're frequently also engaging with other key leaders around the country, whether that's the political side or business side. And I'd probably say international leaders as well. Is there anything you're hearing from them on their thoughts towards building savings? Is someone doing something that we are not that you think we should? I'm coming back to Kiwi Save it. Yeah. Yeah. There are a lot of economies where that is more advanced. Yeah. I do think that there are changes that can be made. And the current government's made some changes already. I think one of the things that I think I admire in terms of some of the overseas settings is long-term planning. So what I would encourage us to do is again have this bipartisan long-term planning rather than short-term announcements. So let's set out the roadmap. What does the roadmap look like, for example, in topics that would be Kiwi Save as an example, but infrastructure, long-term, three decade-style and I was going to ask you what-- I was going to get infrastructure, were you? Well, no, I was more going to go, what do you consider long-term? Right. And if it's decades we're talking instead of maybe two to three political cycles. Right. So some topics need longer-term. One of the things I really admire and learning about Teo Moldy is the 100-year view. Yeah. So for some things, you can think about the 100-year view. For some things, a 30-year roadmap might be the right time frame. And again, I bring that to infrastructure. And you can say-- and when you think about Kiwi Save as an example-- We should.
be thinking about lifetimes. So that needs a multi decade sort of thought process around what does it look like to set up for a great retirement because let's face it we're all living longer. That's well hopefully so I always love that I think it's you know there's always Buffett quote Buffett or manga one of the you know you know plant trees that you will never sit under yes you know instead of those things so I guess before I get into infrastructure because I know that's a real key focus for us and for you and if you heard you talk as an interim to that is there anything that you know when you're setting strategy or doing initiatives that you won't be there for maybe the benefit to the customer is there anything yeah how do you you know manage through that a lot of it actually like there's there's so many things that you're doing that you won't like potentially see that absolutely absolutely you know an example of that is our financial well-being work you know we set out to say what does financial well-being look like for the country and we did a lot of research done a lot of building tools for people to use we've been monitoring that for six years but that's kind of like a lifetime of work yeah open people step by step just take and again it's about all of the small little tiny things that people can do that really add up yeah you know it's a lesson I think about myself you know I was lucky enough I guess to spend some time working in Australia and they had compulsory contributions yeah I benefited from that yeah just being forced to say just being forced to say yeah and so and it's not until you actually get older that you go wow I'm so glad that that happened young me might not have the chance to opt out of it might not young me might have spent a bit more on a car I don't know put that ear off all on the back instead of just the standard you know like the factory settings the other theme I we've touched on already is to get your thoughts on this infrastructure and keen listeners will know that we've been talking about how infrastructure has been a growing part of ASB's or our investment portfolios where they work with BlackRock and you know we've also you know I've heard you speak in a number of times on its criticality to NZ's future just why is it front of mind for you so much and potentially being and we did a bit of research you know we've been spending a lot of time thinking around you know the country how does the country prosper what are the enablers of that prosperity and one of them is infrastructure and so the research we did that said basically New Zealand needs one trillion dollars worth of investment in the next 30 years in infrastructure and infrastructure of all categories so that can be roads it can be hospitals it can be education so infrastructure that enables the country let's face it that trillion dollars is going to have to come from a lot of different places and to be able to execute on that you need a lot of different skills as well which is why it's so important to have a multi decade time frame en road map so that you can get the surety of those skills that then promotes confidence in the delivery which also promotes confidence in attracting the capital. So the skills aren't just potentially people that the tunneling machine is it it's the whole stack of skills that you need to attract money and absolutely what to go and so you know one of the things that we've been doing is investing in those skills so we've been trying to find different people around the world who have had a lot of infrastructure experience attracting them to ASB so that we can think about how we can support and play our part and play our part. Shifting to kind of you know the next generation I guess we've talked a little bit about it. We're seeing younger generations approach wealth building differently like we've done events around the country in the like sort of towards the end of last calendar year and a lot of people and couples who've done really well in their life we talked about different themes and different you know challenges they were facing. One of the ones that came up at every event was my kids have started investing more than I thought how do I slow them down or you know some of these questions that's potentially a good problem to have but are you noticing anything you know differently in your time at ASB from start to now around younger generations and now they're thinking. So it's a definite trend that I think one of the in terms of young children becoming very interested in investing in different asset classes and I think that's a very healthy thing. The one thing that troubles me though is some of the motivation for it and some of the motivation is we feel locked out of homes and I don't like that. I don't like the sense that younger generations have given up on the idea of something that they want which is a home. And so that is something just as a little segue. There's something that again ASB is really focused on. You know if I think about up and down the country Christchurch is an area where they've got really good stability in home loan prices. They've had the opportunity to really think about the supply of homes which is matching demand and that's creating a better equilibrium. So you know we need to think about what's our role to play in helping make sure that there is a supply of affordable warm dry safe homes and multiple ways to get into them. And so again that's an area that ASB is really investing time and energy and effort in trying to play our part to bring that supply on. So that the home ownership goal can be achievable. So I guess that's I like where you focus there because it's not necessarily supplanting the home and it's important it's almost like the home will continue to be a part if you're lucky to consider it a portfolio or if it's just your home it's still central because you might not think you need a home when you're maybe on by yourself but once you cup a lap you still want to go to IKEA and get that house out right? It's still. I love IKEA. Credible isn't that. Yeah it's been a lot of time there. But it remains central right? So it's not I get a case of replacing it. I always think about financial independence, financial well-being, every family and every individual have different aspirations right? But you want to be able to make sure that we're creating the conditions again in this country so that it's possible you help people make progress towards and the home is still central for a lot of people's thinking. Whether you're young and you want an investment property you know that old adage of you know get into the home loan market you might not be able to afford to live in it yourself so you can like rent it out and start that way. Or you work and you might be in different spots. Exactly. Or come together with a couple of people there's multiple different options there but back to your actual original question there's a lot of interest in other forms of investing particularly equities. Yes. Other forms you know ETFs investments etc so and I think KiwiSave has played a bit of a role in that too. Young people you know as soon as you get your first job KiwiSave is opening people's eyes until what is this thing and what's behind it? Yeah and I guess also that you know when it starts to potentially grow more for markets doing its thing then just your contributions are sort of that so you change. Is there any advice I guess not necessarily to the person that mentioned I want assets for Christmas but maybe you know that example you've just said around the the first time buyer maybe phase of your life when you were there. Is there any advice you'd give that person now based on what you know? I personally think that getting you have to get advice and support from somewhere. I would reach out there's so many great places to get advice and obviously ASB is really happy to provide it too so that would be my number one piece of advice. Yes don't suffer in silence and think you have to you know just just ask tiktok for it. I want to make sure we just don't focus on the youth of today like we try and always take both sides of sort of the balance sheet as such but for those in an or approaching retirement again the same sort of question from a couple of questions before if you notice any changes that New Zealanders in this life stage are making or we need to be more aware of. Obviously the thing that I follow that you're very strong advocate for is being careful on frauds and scams but is there anything else that you kind of is top of mine for that generation? As an aside, frauds and scams that goes for everyone. Yeah. Yeah. Old businesses. Yeah. Some of the business forwards are massive but that's we can segue off into that later but again I think it's volatility because you know if you've been able to sort of save for your retirement and you're watching it move up and down as markets move up and down. Yes. You've got to be really thoughtful about what fund your own how's that performing again though that's back to trying to make sure that you can see through some of the noise but get advice. Yes. I would say the same thing with everyone. Don't react stay calm get advice. Yeah we did a talk to NZ law firm the other day me and Christian Brown one of the questions we you know was basically what is a you know what is a fund manager's sort of call role. I sort of went well when there's something hits the fan you've got to be there. Yes. And they've got to hear and see because every correction feels every corrections normal until it's the one you're in. And it's kind of like you know it's our job to really step in that's what the podcast is always been designed to do. It's interesting you raised volatility because it's it is so central and you think you're okay with it until it happens. Exactly so I'll give you a couple of examples actually. So if we just use some in recent memory COVID what we saw during COVID was a lot of volatility and unfortunately we saw a lot of people panic. Yes. Take money out of funds. Yeah. Only to down the track put them back into funds. Yes. And during the process they'd lost crystallised it. That's right. That crystallised the loss. And if they had not done that there would have been a better financial position. And in recent sort of market volatility we've really tried to share some of our insights about that. And the pleasing thing is people are feeling more calm about it and we're saying less of that type of activity. So I think that's good that the message is getting through and people are preserving their capital which is really nice.
- Yes. - That's our core thing, as I said, when you need to be available, when you're handing over something, you've potentially worked your whole life for, or at $1,000, I often, you need to see the white to the eyes of the people that are there for you. - And then the other thing I always, and this is not financial advice, but the people who think they can beat markets, there's a lot of people who are like, no, I can beat the market. And we know how many people sit behind the investments that we're offering, all of those deep, deep specialists, global specialists in every type of asset, and the asset allocation, how that comes to be, I always worry when people think that they can beat markets on their own, without the skills and expertise. - That's it, you've got to have a, - It's not something I'm going to do anyway. - Pretty confident, you wouldn't have time to, anyhow, you've got other things to do. - Sure, sure, sure. - Getting to sort of the end of our conversation, but how has ASB evolved from the Auckland Savings Bank, 178 years ago, to kinda today's ASB, that breadth of offering, you know, is there, I guess what's the ambition driving ASB strategy, and where you're taking, I guess, the bank in the future? - Yeah, I'm a big fan of what are the things that you want to hold true to? So what are the things that you want to be known for for 178 years? And then what are the things that are changing? The obvious changes we've gone from just Auckland to the whole of the country, we've gone from just savings to having a full suite of offerings for our customers. So those are some really obvious changes, but what are the things that you want to absolutely hold true to? And for that, we think about our FUCA Puppa, our 178 years, and we draw a lot of, I'm gonna say, inspiration from what we've always been known for, we've always been about the community. We've always been about helping people make progress and save. That was our very origins, and time and time again, we've taken steps to really show both of those things. And then the other thing that we're known for that I really love as well is we say innovation, but what our customers say is super useful. - Yeah. - So they're just like, do things that are super useful for me. And so we always think about, what are those super useful things? And we think about that right across the whole business. So how do we stay true to what we're all about, progress for all New Zealanders? - Yeah. - Making sure that we're always part of communities and building communities in this country. And then doing things that are super useful for people. - Yeah, and I guess those can be your anchors that when decisions hit you every day, you can stress test them against those. - That's right, and it doesn't matter what part of the business. - Yeah. - It doesn't, not the sniff test, but it's almost like the anchor test or these key pillars. In your time, I guess, how long have you been, see you? - Eight years. - Like I've been here, I've been here. - I've been here. - No, I've been here, so. - And two, okay, and two on the board. - Ah, yes. - Okay, yeah, but you're still on the board, but before that. - Yes, before I was seeing. - I was on the board for two years. - So you've been here for almost all of my time at ASP. I guess, what are some of the key things that stand out in this time that we've done for investors, I guess, in New Zealand and for us? I guess the standout one is obviously where you brought on some capability with a certain asset manager. - Yes, that's right. And I think that's pretty well known publicly. But if I take a step back, actually, before we made that decision, we really believed in the value of Kiwisava and our investments business and how that would complement all the other ways that people can invest in my progress. And we wanted to make sure that we were building capability everywhere in every part. And so what I mean by that, we wanted to make sure we had great global expertise. Yes, that's where we made a big investment to bring on BlackRock and as a partner, and that's been phenomenal. But it's not just that, we wanted to build more capability. And so we have external experts come in and really challenge us and what we're doing. And that's through, we have a subboard, actually, with deep external expertise. We also have an investments committee. We also have externals. So we're really inviting a lot of challenge to help us continuously raise the bar on all aspects of what we do. So whether that's what types of funds, how do we communicate to all of our customers when markets are moving or what have you? How do we make sure that we've got nice, easy experiences to help support people making decisions around what fun they're in? So every single part of our business, we're really trying to up our game by investing in it and really seeking this sort of outside and challenge. Yeah, you're always seeking to, well, we learn and be tested on our thinking so. Absolutely. You can't close off. That's right, continually. And to that point, I guess, it was delighted to state that ASB has just been named the KiwiSaver Fund Manager of the year for 2025 at the Morningstar NZ Awards. This is the first time we've won this award in nearly 10 years. I think it was when I just started. We actually won it. But again, it's kind of in a much bigger competitive swimming pool now. And so what makes us so exciting is that it shows our continued commitment and delivering for our customers, our investors, taught Victoria's been saying. And we thank them for their trust they've placed. And it just fuels us to get better, Victoria. I guess that's the perfect illustration, right? Of what you've just been saying. Yeah, I'm super pleased, obviously. Because it's not our money, it's our customers' money. And all of that investment, everything that we've been trying to do has paid off in better outcomes for our customers. So that's years and years and years of consistent execution. And so I'm stoked. I guess we always like to be number one, right? We do. And so finally, we've talked a little bit about how through volatility, we want our customers to engage with us and reach out. And that's our job to also get out to them. But whether it's investing or business building, anything in their financial well-being, anything's a front of mind for you to listen as how they can engage with us wherever they are on their journey. Yeah, I mean, obviously that's a plug for the podcast. Of course, yeah, of course. But it's back to what I said originally. Come and get some advice. Sit down, have a chat. Ask all of those questions that perhaps you haven't asked before. And learn. It's a really important-- I think financial-- I'd discovered it's financial independence, the ability to do the things that you want to be able to do in life. It's been the time trying to understand it because it can really help support the life that you want to live. So just come and get that advice. Listen to Nojjel's podcast. Thank you. Thank you. It's going to get a bit of plug. I guess it's just start, right? It's the best time to start as you say, say, "Seg and Bess is today," right? Absolutely. And now to our favorite, or my favorite question, and I'm sure it's yours as well, Victoria, having listened to all of our podcasts, I'm sure. It's one that I ask all of our guests, what's something that you're reading, watching, or listening to that you would recommend to our listeners? Or all the staff. He'll be listening in who they'll be doing exactly this. I don't have a lot of time to watch much, actually. So I'll leave that category, but reading, I think, some books have had a really big impact on me in terms of reading. So in the part-- actually, this is university. The only text I ever remember from university was Victor Frankl's man's search for meaning, had a profound impact on me then. But currently, I'm reading a book called Fast Forward. Yes. It's quite topical now because it's a lot about volatility. And how do you make sense out of the noise? And what signals are you trying to understand and how do you go about that? So it feels very relevant right now. So that's on the business side of it. And on the personal side of it, I love a good book of prize winner, Luminaries, Eleanor Catton, Yang Kiwi author. But at the moment, I'm reading Orbital. So don't worry, this is not a big tomb like Luminaries was. It's a really nice little book around Astronauts and Space called Orbital. So a great read. And because I've read man's search for meaning off the back of you, Rick, I mean, I'm not sure where I first heard it when you started. Amazing book, a sense of purpose, finding meaning, and probably what is the worst environment you could. Was it prescribed reading at university? Or did you find it? No, it was actually prescribed reading. And I always thanked the professor who it was a fourth year class and it really hit this chord with man. Actually just sidebar, but I recently went to Poland to watch one of my sons compete. So we went to the concentration camp. I bought a bunch more copies, some for the kids. And another one for me. So I lost my originals. So it's back on the bookshelf. And you can read it. And you're 20s, you're 30s, you're 40s, you're 50s. It probably has different significance in different phases of your life. But yeah, reconnected with that book again. Because after my wife does family therapy, couples therapy and things. And also knows a lot of sort of the psychology text. So she saw that adboarder. And then she got me off the back of it. And I mentioned you'd recommended it. But she got found the happiest man on earth, which was what I was going to say today off the back of-- and that's from a chap called Eddie Jaku, who's an Australian holocaust survivor. Similar thing, not an arduous read in terms of volume. But again, those wonderful stories, finding joy and positivity even in extreme situations. So I chap you with immigrant to Australia. And then-- Yeah, yeah. I mean, I think there's a lot to take out of that, particularly right now, again, because there's a lot going on in our world. Yes. And I can feel overwhelming. And so I think grabbing the-- and same thing with New Zealand. Like there's a lot of like Naysayers as well-- Yeah, headlines. --around headlines and difficult things that you don't want to read about our country. But I think the important thing is to try-- for me, as a way, I always try and think about it. There's so much beauty in this country. And I don't mean beauty. And the physical ends get this, that too. Yeah. But there's so much good about the country. And so we've got to get in and really make most of the that you.
natural environment that we've inherited and I think there's a lot that this country can really achieve and deliver if we get our minds working in that way together. - Yeah, I'm really done. I'm ready to walk the Able Tasman now. I've got all the motivation after hearing that. So, Victoria, thank you so much for joining us today. I really thank you. You know, it's been awesome to have you here. I feel like we should have had you here earlier, but we've got you for this one. So, I'm hoping you can have your back. The sharing your valuable perspectives and I guess that positivity and future of wealth in New Zealand. It's been a pleasure having you on the podcast and we look forward to seeing how your vision continues to shape the banking industry and inspire New Zealanders and our staff. So, thanks again for your time. I hope you had a good time. - Cheers. Thanks for having me on the show. - And thanks to you, our listeners, for joining us again for this extra special edition. We hope you've enjoyed it and we hope to get Victoria back sometime in the future as well. Until next time, happy investing and bye for now. Thanks for listening to the ASB Investment Podcast. If you have any thoughts on this episode or if there's anything good like us to discuss on a future show, get in touch with us at
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