LSE 00:01
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Peter Higgins 00:17
Hello and welcome to this Investing Matters podcast. Today I have the privilege of speaking with Danni Hewson. Danni is the Head of Financial Analysis at AJ Bell, one of the UK's leading investment platforms.
Danni joined the company in 2021 and works across television, radio and online platforms as a commentator and writer delivering analysis across the UK and global business and financial sectors, a fantastic and massive job.
Prior to that, Danni had 19 years of working across the BBC presenting reporting business news and a variety of programmes including BBC Breakfast, BBC News Channel, BBC Look North and latterly Radio Five Live’s business programme Wake Up to Money which I've watched quite a few times. Danni thanks so much for joining me I know are busy you are and you've got two teenage daughters as well. What's juggling?
Danni Hewson 01:10
Yeah, lots of juggling at the moment. But thankfully now I work from my kitchen table most of the time. You know, my kitchen doubles as a TV or radio studio. So it just means that I can talk to people right around the world from the comfort of my home in Huddersfield.
Peter Higgins 01:27
Yeah I saw that. I'm not sure if it was Sky or the BBC live from Huddersfield, I thought oh, that just brings cockles to my heart, up north you know, not so far away for I was brought up in Oldham, so fantastic.
Danni Hewson 01:39
Yeah, I quite like it. You know, sometimes, particularly when I'm broadcasting maybe for you know, ABC Australia or something like that. They're like, where are you? It's like, well, I’m in Huddersfield but possibly people are not going to quite know where that is.
You can say Yorkshire, often it turns into near Leeds or near Manchester. But I just quite like the fact that people are hearing voices that aren't London voices. They're not, you know, the sort of typical people that you would hear and I think that that brings a different slant to things.
Peter Higgins 02:13
Absoloutely, I've got fond memories of Huddersfield, I’ve got family in Huddersfield. And we've got really dear friends very close to you, Brighouse.
Danni Hewson 02:21
Yes, that's where my husband's from initially. We know it well.
Peter Higgins 02:26
Yes. Great part of Huddersfield in the north. Right Danni I want to start this interview with your journey, which started with you attaining a university degree in English and media. And you went on to get a postgraduate qualification in broadcast journalism, what sparked your interest in media and journalism? Where did you gain your qualifications?
Danni Hewson 02:45
So I kind of fell into it, to be honest with you, I worked all the way through university, and I sort of quite fancied I was good at English. I liked doing English, and the media was offered as an option. So I did that and enjoyed it. And I was working in a Mexican restaurant. And this guy, he was a regular came in and said, from near Hull, aren't you? Because that's where I'm originally from.
I said, yes. So I've just been doing some work with a radio station there. What are you doing when you finish your degree? I don't know. And he said why don't you get some work experience there?
So that's exactly what I did.
I went to Viking Radio, and I worked in their advertising department, their creative department, and I was actually making adverts.
So you know, splicing the things together. This guy was a voiceover artist. And I quite enjoyed it. But it just wasn't where I wanted to go and I sort of drifted into doing, spending a bit of time with some of the DJs.
And again, that wasn't quite me. And then I sort of went into the news department, I thought, I like this. This is telling people's stories in a way that really sort of resonated, so because of that. They said, Okay, well, if you want to do this as a job, you'll have to go and get your postgraduate qualification. So I went to Trinity in Leeds and the editor there, the guy that was running the course was also the news editor of pulse radio at the time in Bradford, and he just knew how to grab an audience's attention and he was just absolutely brilliant at making us find the story and boil it down to the absolute minimum, he would always walk in and go, okay, you've walked into a pub, now tell me the story.
I want 30 seconds and you've got to sell it. Just imagine that you're trying to have a conversation with people at a bar and you've got to interest them beyond you know, what they're talking about what’s happened in their family today.
And that really is how it started for me. I just really enjoyed finding out about other people's lives other people's stories. The opportunity to go behind closed doors really appealed. And that was where it started. And actually he you gave me my third job. So yeah, it was a fantastic introduction to journalism.
Peter Higgins 05:12
Brilliant. I love that the fact that you started in local radio and you moved on, and you started to specialise in the entertainment side of journalism. Yeah, can you just share with our audience, some of the very famous individuals that you ended up interviewing, meeting, you know, looking at their careers?
Danni Hewson 05:30
Well, I was on what's called the circuit for a while. So I had the brilliant opportunity of presenting an entertainment programme for Radio Aire in Leeds, which was a half hour programme, and they gave me the chance to go off and do the circuit.
So if an artist had a new album out, they would often come into the radio station and be interviewed.
So I had a chance to interview Sting and Tom Jones, among others.
And then we also focused on films that are coming out as well. So if you've got a new release coming out, then the distributor has what's called a junket.
So they bring the stars into London, or we used to have a cinema days, which was in a tent in the carpark of a cinema right around the country three times a year where they would play all the latest films.
So you would basically watch films for 14 hours or four days in a row and in between, you would get these amazing stars either, you know, brought in through the back door of a cinema in Leicester, on the big screen.
So yeah, I had the chance to interview Will Smith, Susan Sarandon, just some incredible people, Gary Oldman will stick forever in my mind, because I was really new and the one thing that you're always taught in journalism is never asked a closed question.
Because if someone's feeling that way out, if you ask them something that they can say yes or no to, chances are they will. So I asked him, it was for Lost in Space and he played the scientist there. And at the time, he'd be doing lot directing and various things and I said, have you ever thought about directing an action movie like this? No. And that was it. That was my question. That was the answer to my question. So that was certainly something that I learned from yeah.
Peter Higgins 07:21
Brilliant. I love all that. And obviously, you know, quite a few of those names resonate with me, especially Will Smith, given what's happened to him recently, as well, that's changed a little bit. I'm sure you'd like to interview him. That's it. What were you thinking mate? You know?
Danni Hewson 07:33
Yeah, it's interesting, because, you know, actors and artists, they're there to sell something. So when you interviewed them, you got them selling something they were absolutely on. So everybody pretty much was just incredibly ‘hi, how are you?’ Made eye contact made sure they knew your name.
But the kind of questions that you were able to ask, you know, it got a bit boring after a while.
And it just, it sounds really glamorous, but it's not, you know, you're hanging around for hours for the opportunity to maybe ask one question, because I was doing radio, you would be in a small huddle. So there will be maybe four or five other journalists, and you would sort of wait for someone to come in and you've got five minutes, the five of you.
So you've got sort of one question. So when you say interview, you know, it was it was a one question and you're done. So it wasn't particularly fulfilling. But I do wish that phones, you know, smartphones had been around at the time, because they weren't I had my little Nokia. So there are no, no photographic evidence of all of this. But you know, somewhere out there, there are a lot of radio programmes.
Peter Higgins 08:49
Brilliant. Brilliant. Yeah, there'll be keeping those in the archive. Now, you touched on it. You said it appeared glamorous, but wasn't. So you moved from what I thought was the glamorous side of journalism to the news focused end of it now and you moved to ITN, some massive entity at the time. And hope you don't mind me asking this because you were on shift at the ITN in the news channel at the time of 9/11.
How must that have been for you? The team never really asked copy with that kind of stress and pressure of that particular day. That's proper news stuff there.
Danni Hewson 09:21
It was, yeah, possibly one of the hardest days of my career, I was working for the ITN news channel at the time, which of course no longer exists. But ITN made sort of forays into that sector to compete with the BBC and Sky.
So we were doing rolling news, and this happened, and we were watching you know, you've got all these TV's on and the whole place just went silent. It was for a beat. And then of course, the shouting starts we need to find out what's going on somebody get on the phone.
Somebody get me someone from New York, somebody makes sure that we've got you know people out there that we can talk to. And I was on an early shift. So I was supposed to finish at lunchtime.
I didn't get out there until I think nine o'clock that evening. Yeah, it was it was a long shift. But nobody sort of questioned what we were doing. It was just hugely significant.
And we just wanted to make sure that we told it right. And I think I think we did a good job that day. But yeah, those images, well, they'll stick with you.
Peter Higgins 10:30
Yeah, I mean, I think everybody that was around that time and dealt with that particular situation and recorded it and commentated and when news presenters in the background that deal with it, absolutely have put together an archive of unbelievable information there for people to actually go back and look on and congratulate professionals, every single one of them. So you're one of them Danni. So thank you ever so much for that.
Danni Hewson 10:50
The bit that sticks, in my mind is we're sort of tasked to start phoning around to get people on air. And I remember phoning a Starbucks not far from where the towers came down, and the person on the phone was just, you know, shocked. And we got them on air for about two minutes. And then it's got to go, there's just so much dust got to go. We're being asked to evacuate. So, yeah. Quite a moment.
Peter Higgins 11:17
Yeah I mean, obviously, you're in Central London at that time. And you know, the hub of the city financial capital. Yeah. So you then move on from ITN. You know, you're essentially in Central London, you go back up north. Yeah. You refreshed you recharge, you know, you find your centre, as we say up north. Yeah, having spent, you know, X amount of years in Central London, and you joined the BBC, Danni, you were with them for 19 years, you had several roles there.
Can you tell us about some of your roles and the growth that you encompassed? During that time, please?
Danni Hewson 11:48
Yeah, move back up north, my now husband was still living up here. So I'd been doing that sort of half life thing from the time that I was in London and the opportunity came up to join the local BBC Television evening news programme.
And it was just something that I couldn't turn down, I'd loved my time at ITN, but it was time to go home. And yeah, it started out slow. You know, you're doing all the menial stuff and then gradually get you get the opportunity to go out and report on what's going on locally, and develop my skills. And then we had the financial crash. And I was doing an awful lot of politics at the time. And my focus was very much pushed on to people's lives and the impact people's finances were taking from what was going on.
So I ended up doing an awful lot about benefits and wages and the difficulty that people were having with the cost of living it all sounds so you know, incredibly similar to where we are right now.
But in doing that, and then talking about jobs, the it sort of moved then into business, because when you're talking about jobs, you're obviously talking about job creation.
You're also talking about companies letting people go and I had the opportunity then to sort of dig into a little bit more about what it was that made businesses tick, what sectors were working, what sectors weren't working.
And for me, it was the opportunity, as I say, to go behind the door.
So you know, these great big warehouses that you see by the side of the motorway that you wonder what goes on in there, I got a chance to do that, you know, I got the opportunity to go down Kellingley Pit, which was the UK is last deep mine.
So I got a chance to go down to the coalface before it was closed, discover what it was like down there. And you go down this lift shaft and then they have this sort of train that takes you because it's a long way takes you a long time to get to the coalface.
But because we weren't there, we would got there as the shift started, but we were leaving before the shift finished.
So it's like, well, how do we get back, the only way to get back was to ride back with the coal. So you're laying on the conveyor belt holding on to the recording kicks.
We've taken a couple of cameras down there. So I'm holding the camera like a baby lying back with the coal. And I think it took me a good couple of weeks to finally stop seeing coal dust come out of my pores when I was having a shower, but went out on oil rigs and to bakeries and on farms and really discovered the diversity of business in the UK and you find the differences but also you find the similarities and the stories that those people had about how they were able to create these businesses, the challenges that they were dealing with the opportunities that they will have looking at that, for me, it suddenly was like I'm home.
You know, it wasn't just the funky outfits, because business reporting is the only place where you get to wear, you know, your white coats and your dodgy hats or, you know, your whole mining regalia or anything like that.
It wasn't just that it really was, I found it absolutely fascinating. I hope that I created simple but interesting reports for people who maybe weren't thinking that business was interesting, that didn't think it had anything to do with them, when actually, you know, businesses, the health of businesses has to do with all of us.
Peter Higgins 15:38
I absolutely agree. And I think you did that in a really quite smooth, I think the word smooth comes to mind, because it's about informing people in such a way that you're trying to make jargon free.
You're trying to get them to understand it. And I think there's an art really in simplifying things so that everybody understands it. So it doesn't become fear scared, you can't be scared of it.
So let's explain in such a way that everybody gets it, you know, the programme you presented Wake up to money, that was where I think you just absolutely smashed it.
Because everybody was like, yeah, I'm going to wake up to Danni, Danni's here to just explain things to me. You know, I'm waiting for that. Not listening to him or her. I'm going to wait for Danni to tell me how it how it is, you know what the reality is of it all?
Danni Hewson 16:18
Yeah, it is a skill. And I think it's a really important skill, particularly in the world of finance and economics, I think there is a danger that you get sucked into using the jargon. And that's fine. But people don't outside of finance and economics, they don't understand the jargon. And then the jargon becomes a barrier to them being interested or invested in it, because the jargon means that they don't understand.
And I think sometimes people use the jargon, because maybe they don't understand quite so much.
And it's really hard to take that jargon. And to say, hang on a second, what does that actually mean?
That is quite tricky to do, because try and sort of simplify some of the really technical language that's used and presented to people in a way that they can get it is a skill.
And there are some brilliant commentators out there who can do that, who are just perfect at that. And I think they're the ones that sort of know the stuff inside now. And I have to say that I was guilty of doing that. Because I think in some ways, when you're working in finance, it's sort of that's just how it is.
And people just use that jargon, the language. And if you don't, you feel like maybe they think you don't know what you're talking about.
So I when I first joined AJ Bell, I suddenly found myself doing interviews where I'm using this jargon, and I sort of did about the second or third one, I listened back. And I'm like, this is exactly the sort of thing that you were asking people not to do. But it's it's an easy trap to fall into. No,
Peter Higgins 17:57
I mean, you've done phenomenally well. And as you described, in your own words, here, Danny, you know, after 19 years at BBC, you took what you describe as your first job in finance, at AJ Bell, what led to the leap, obviously, you can see easing towards it.
Now you're enjoying talking about finances, seeing all the different nuances of what, how it marries to everything else that goes on in our lives. So this is a massive leap of faith for you to go from what you were doing, and the new professionalism, new qualifications needed, etc, etc.
So what was that they come for you? Did you see the opportunity to think yeah, that's me, I can do that.
Danni Hewson 18:30
I was presenting Wake Up to Money during COVID.
So suddenly, like that overnight, we couldn't be in a studio, we had to do things from a kitchen table, or wherever, and did that for a few months. And then I sort of went back to doing if I wasn't doing the Wake Up to Money and the breakfast stuff, I was doing a lot of drive time. And the job had just changed. And I didn't, I wasn't enjoying it as much. And there were a lot of changes going on at the BBC. And my kids were they'd got used to having me at home as well. And then I knew the thing about reporting is that you are out and about so when I was with the BBC doing the job before COVID, you know, you could be doing 12 hours a day. And you could start in the north and end up you know, in Leicestershire, and not being around for the kids was quite hard.
But also, I think when you start to feel too comfortable with something, I think there's a real danger there that you're not doing your best and I don't think I was doing my best.
By the time I got to the end of my time with the BBC. I was just ready for a new challenge.
And it came up as in conversation with one of my colleagues who also used to appear on the Wake Up to Money programme as a commentator, and he said, well, have you thought about doing this?
And I haven't, because like, no, is that an option? Yeah, they came to me and said, well, you know, would you be interested, and I jumped at the chance, I met Andy Bell. And I just thought he was just such a fantastic and inspirational leader and I really liked the company and the fact that it was based in the north as well.
So I could stay based in the north, and the fact that they were going to give me the opportunity to keep doing what I really love doing, which was to try and make the complicated, simple and to try and make sure that people who weren't involved in finance, who maybe were frightened of some of the economics and financial news that was around to try and make it accessible for them. So it just came at the right time. But it was frightening, because, you know, as you sort of heading towards 50, and you're making a complete change in career, not only changing career, but a change in the sector. Yeah. It just it seemed right.
Peter Higgins 21:01
Yeah, it's working absolutely fantastically, because within six months of being there, you launched the the massive and significant Money Matters campaign that's focused on helping women engaged in their own finances and starting talking about money, which is a vital subject that we need to, you know, enhance going forward. Can you tell us about that campaign, how it's going the insights, you've learned what's going on with it all?
Danni Hewson 21:22
Women are different, they do think about finance in a slightly different way. That's not to say that what we provide in our Money Matters campaign is dumbed down in any way. It is simplified, which I think is something which is really good, whether you're a man or a woman, or you know, whatever background you are from, and it seeks to engage people and make money relevant to their lives.
I think sometimes you hear terms like investing and you think that's not for me, I don't invest. And when you actually say, well, hang on a second, have you got a house? Have you got a pension? You know, have you got money savings in the bank?
Well, all of those things are investing. It's just in a different sphere, you're thinking about Wall Street, you know, you're thinking about Gordon Gekko and you know, deal deal. That's not what it's about.
It's about making sure that you are looking after your financial well-being and we did a survey, and it was something that we already knew, we knew that life events for women would mean that they would take career breaks, they maybe would work part time, they maybe would decide to change their career path. And they would either stop investing in a pension, or they would take a break, or the amount that they were saving in a pension would go way down.
And we did this survey, and we sort of extrapolated the figures, and we found a 1.6 5 trillion pound gender investment gap.
Because women save less than men for their retirement, they have tend to have not always, but a lot of women have sort of less disposable income, they don't feel once they get to a certain point that they can continue to invest.
And we just wanted to make sure that women were having this conversation, and we run a number of events. And I think those are really useful because we don't say we don't want men to come along. But we do say this is an event aimed at women.
And it means that is a space that they can ask questions. When we've held events where we've had a mixed audience, you tend to find that men will ask the questions, and the women will sit back and be quiet.
Whereas if it's predominantly women in the audience, then they get to ask questions. And women make brilliant investors. You know, if you look at the portfolios of, you know, our clients, we know what they're doing. They make great investors, they think things through, they're smart, they're not risk averse.
They're just know the amount of risk that they're willing to take. And sometimes you can find that men, particularly young men can get a bit gung ho and they can sort of race for the prize. And, you know, I've spoken to so many people who've, you know, put money into crypto coin and lost a lot of money because they're seeing these stories of crypto millionaires and thinking, I'm going to go for that.
It's okay. I know what I'm doing.
And actually, I think that women tend to take that sort of step back that they have a very different relationship with investing. So that's why we launched money matters.
So it's been running for nearly two years now. And our aim was to increase the number of women on the platform and we have seen a big difference a big shift in the number of women using the platform which is fantastic, because investing should be for everybody.
It shouldn't just be for, you know, that small sector of society who have huge amounts of cash or, you know, say, I'm just going to do it.
Peter Higgins 25:13
Absolutely. And I think the other thing as well is the fact that I know you touched on it briefly there is that invariably over the long term, and all the research proves this over and over again, is that women are actually better investors than men. You know, it's a recurring thing that I keep finding.
Danni Hewson 25:28
Yes, women, they don't tend to meddle as much, you know, men have these sweeping generalisations, of course, because there will be a lot of investors out there who don't, but it can be that sort of women tend to be a lot more cool headed when it comes to their investment strategy. And they will take a much longer picture, whereas sometimes men can be sort of drawn to the big, shiny prize and make mistakes or act in a knee jerk manner.
You know, it's that sort of fear of missing out, whereas women investors do tend to take that breath and not jump.
Peter Higgins 26:07
Indeed, now AJ Bell is a fantastic and one of the leading UK investment platforms Danni, we can't go through this interview without talking about the sheer scale of it, the size of it, it's 1.3 5 billion market cap company.
Can you just tell us a little bit gives an overview of all the different some of the services that it does provisions that it provides the clients, etc, etc, etc.
Looking at ISAs, you're looking at savings, you're looking at SIPPs, you're looking at pensions, it's loads to it that it does.
Danni Hewson 26:36
Yeah, it's it's a really interesting business because it has sort of dual strands. So it has its DTC direct to consumer bit. So that's the bit where, you know, you're I could say we'd like to open an ISA, or a LISA or a SIPP or a dealing account.
But it also has the advice side of the business as well. So if you've got a financial advisor, they might invest your money on the AJ Bell platform. So that means it's quite diverse. And it's also quite innovative.
So as well as the Money Matters campaign, which I was just talking about, we've also recently launched Dodl, the investing app, it's an app only.
And that's very much for younger people, or at least for new investors, it's stripped back, it's simplified.
But I mean, AJ bell’s got now a whole variety of funds. It's growing all the time, it's certainly trying to make investing as accessible to everybody as it can and it's involved in campaigning, and one of the latest campaigns that Andy Bell’s launched, he's obviously not CEO anymore, but he's still very much involved as a consultant. And it's about just having the one ISA because that in terms of a savings product for people, that's probably the most popular the most well-known savings products.
But once you get past that, and you say, okay, you know, what's a LISA or a JISA? And you know, the different types of ISAs that you can get, it gets ridiculously complicated. And how much money can I put it?
Well, you know, I've got 20,000, but I've also got a LISA, is that mean that I can have 24,000? And can I take the money out of my LISA If I need to get at it? Oh, no, I can't, because it's not buying a house. It is complicated. And if it were less complicated, if there was just one ISA one rule, then it would, I think, maybe make more people think about investing their money, because also there's a whole load of cash out there that is just sitting in people's bank accounts, and they're not shopping around for the best interest rates.
They're not taking advantage of the ability to get those compound returns, you know, you think about if you invest it and you invest it early, and then that money that you have gets bigger and bigger and bigger. It's it's not about investing a million quid it's about investing 100 quid when you're 18 years old, and doing that regularly, and then you know, investing 10% of your income, that is how you generate that kind of financial wealth, financial well-being that people don't think is attainable sometimes.
So yeah, I mean, it's a huge organisation now, but it's still very much focused on the one thing and that is on the customer on giving them the best possible experience and you know, helping them feel good investing. That's the new strap line with the new advert with the bells that go off, feel good investing it. It shouldn't be stuffy and hard. You know, a lot of people are investing in for big, fantastic moments in their life, you know buying a house, having a kid, getting married, you know, finishing work, these are huge moments in our life and we should enjoy them. So yeah, I think that's very much what AJ Bell is about.
LSE 30:15
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Peter Higgins 30:32
Indeed, I’ll add this here you've touched on it there, the former CEO of AJ Bell, Andy Bell, pushing forward this co-written paper to the chancellor effectively, that what he deems as the one ISA rather than six wrappers, let's just put it all in one, which you've just covered there.
And part of what it says here regarding the research that AJ Bell has done is that 49% of individuals think different versions of ISAs make them complicated the 30% say, they would save more products if it was less complicated. So that's what it's all about really, you know.
Danni Hewson 31:07
It's about stripping away the complicated and making it easy and making it transparent as well, I think people have been burned because they don't understand maybe they don't understand the charges or they don't understand, you know, the limits or they get suddenly hit with a great big tax bill, because they haven't understood that they're dealing account isn't a tax wrapper. It is, the more simple we can make investing, the more people will invest straightforward.
Peter Higgins 31:42
Absolutely. Now then Danni, I can't go through this interview with you without mentioning the Shares Magazine, because that's where I did a lot of my learning. I'm a bit of a tech junkie.
So Steve Frazer, of course, was my go to individual and obviously you had Russ Mould, you know, doing all the editing, absolutely loved it. And then I've learned a fair bit from Dan Coatsworth.
You said at the middle of this, and I have my notes to ask you anyway, regarding this, this was your first job in finance, you went into AJ Bell as a rookie, really, you know, having done all the other stuff that you've done, and despite you know, Wake up for Money, you said this is your first job in finance. So who has been the person that AJ Bell over the past two years or so that you've learned the most from thus far?
Danni Hewson 32:25
That's quite hard, because the one thing about the team at AJ bell that I work with is we all bring something different to the party. So I mean, Russ Mould you mentioned there, you know, he's just he's got such a wealth of knowledge, such a huge brain, and you know, more spreadsheets than I think you could wallpaper the entire M1 with.
Dan Coatesworth just has a way of making things really simple and straightforward.
So he's fantastic. Then we've got Tom Selby, who's our pension guru.
So if you've ever got any questions about the lifetime allowance, or whether or not it really is going to stay where it is or not, here's your guy.
And Laura Suter is just, she's so steeped in personal finance that I have learned from all of them.
And I suppose my job kind of ends up spanning a lot of all the different bits. I do a lot on personal finance, a lot of macro-economics, you won't be surprised that inflation and interest rates have been the data that I've been talking about over the last few months. It's been a bonkers time to be in this game.
I don't think there's ever been a more important time to be somebody commentating on what is going on analysing what's going on, and helping people understand what's going on, because it is having a huge impact on people's lives. And I really liked the fact that, you know, there are conversations now taking place right around the country at dinner tables. So what is a bond? What's going on with interest rates?
Those kind of conversations that didn't use to happen have been happening over the last 12 months.
It's awful, but that's because for some people, they're really struggling. But it's great that finance is being discussed openly. And it's you know, everyday conversation.
Peter Higgins 34:32
Absolutely, you touched upon the learning side of it. And the conversations that now being had what what is the one thing Danni that in the past 10 years or so that you've had a realisation of that having been outside of the finance side you've got a different understanding of it, but now you've got I get that now why that's so important. Everyone's having that moment now we're going I need to do this about my pension, I need to do that about my savings.
What was that one thing that you've gone what the hell Danni?
Danni Hewson 34:58
It's for me, I'm maybe I would have had this sort of epiphany anyway, because like I say, I turned 50 in the summer. So it's a big birthday for me and I think when you sort of get to that sort of age, you do start thinking about retirement and it was, I have to know how much I've got in my pot and I have to know where the different pots are, and what the charges are with that and how much I'm going to have to play with when I retire.
But I think the most important thing was how much I need to play with when I retire. I've never thought about that, you know, I knew that I'd been saving into a pension since I was in my mid-20s and I've been lucky enough to have a couple of good ones.
But I've never thought about how much I would actually need and whether or not the amount that I was saving, and investing was enough, I had not considered it. And I think that's really important, particularly now, because we talk about, you know, you need approximately 70% in terms of your retirement income of what your last income was, in order to sort of maintain that standard of living, but with interest rates, the way that they are, with less people able to get on the housing ladder, with more people now extending the term of their mortgage, there is a huge chance that a lot more people will still be paying for housing costs once they hit retirement age.
So that means that if they want to continue with the same standard of living, they need more in their pot, we're not talking about 70%, because they'll still have to pay for housing, they'll still be needing to find 100%, or they are going to find that the standard of living, we've talked about standard of living eroding, but they'll suddenly be you know, in for a really rude awakening.
So for me, it was knowledge is power. But also knowing what I need to know. I don't think we taught. I mean, outside of finance, it wasn't something that I spoke about. We didn't talk about pensions, we didn't talk about investment, we would maybe have conversations about, you know, house mortgages, house purchases, whether or not we were able to save up enough to get on the housing ladder, we'd maybe talk about, you know, if we got kids whether or not we were going to be able to help them with their student pay for their courses. But we wouldn't talk about pensions and investments not in the same way.
And the people that I now work with, you know, there are people in their 20s, who have got it all going on. You know, they've been saving into lifetime ISAs since they were 18.
So they were able to buy a house at 25. Whereas I was over 30 And I got 100% mortgage.
I didn't have a deposit. And I you know, we bought in Huddersfield. So the housing market was pretty sluggish back then, shall we say? So yeah, I think that's the one thing that I've learned that I think we need to shout about outside of finance.
Peter Higgins 38:12
Absolutely agree. Now, you touched on your pensions and your savings regarding that. Could you tell us how you go about making selections for your pension? So you make sure that you're prepared for life after work?
Danni Hewson 38:24
Yeah, I mean, that sort of life styling thing, where as you get older, you get shoved more into bonds. And we've clearly seen the impact on the bond market over the last year, which is, you know, made you sort of winced a bit because I didn't have huge amounts of experience. All my pensions have been in traditional pension schemes, and I've not been involved in any of that.
So I'm just in the process of moving to a SIPP because you sort of look at your charges. And you look at where those investments are and and I spend all day every day looking at stock markets and businesses. And because I've spent, you know, 10 more than 10 years as a business reporter. I know how businesses work. So you sort of can look beyond the numbers on a page, when you get earnings updates, you're sort of looking at the outlook, you're looking at the capex, you're thinking about the sectors and how those sectors are changing. Even you know, my stint doing entertainment when you're now talking about Netflix and Disney and you're thinking about the amount of content that they're having to produce. And you know, because of my experience, I know how much time and money it takes to produce that kind of content and I know the appetite for it and so yeah for me now it's a matter of making sure that when you're talking about a diversified portfolio because we all need to think about that the last you know couple of years has taught as that.
But you also need to think about how much risk you're prepared to take and whether or not those you know, sort of perceived safe options really are as safe as they were.
So I've certainly sort of, you know, you're looking at that sort of 70/30 split, and maybe sort of inching it back towards the sort of equities, equities have, you know, outperformed tremendously.
That doesn't mean they're always going to. But I think right now, if you're thinking about where to put your money for me, I'm sort of gearing more towards the sort of equities side than the bond market.
Although, you know, you still need to have some of that in your portfolio, if you're going to make sure that you are cushioned from every eventuality, and I think a lot more people are talking about income now as well, when we're thinking about investments.
That's one of the things that I used to work with Mickey Clark, who I'm sure people listening will remember, Mickey commentator on Five Live for a lot of years on Wake Up to Money. And he would always talk about dividends.
And dividends are kind of gone out of fashion. And some people that I worked with Mickey's always talking about dividends, but actually, it now has become something, again, that people are really looking for when they're thinking about their investments.
And I think that is because, you know, the way that we take our retirement income has changed, you know, we maybe don't want to draw down a huge POB we're not buying an annuity, we're thinking about making, you know, our investments continue as we get older.
So yeah, I think that the conversation is certainly changing. And I think sort of, you know, investments that are also giving you an income can be really useful, depending on where you are.
Peter Higgins 41:52
Absolutely. You touched on the diversification of the portfolios as well, there seems to be a recurring issue with we as investors being very, very UK centric, how do we go about educating individuals about the universe of investments dependent on their risk profile?
Danni Hewson 42:09
Yeah, I think investors certainly are more minded to invest in US companies than there may be used to be. Because those companies are household names, I think, you know, we are by our nature, we know what we like, and we like what we know. So household names are much more appealing, because you think, well, I can see and I can touch that. Whereas you know, you're talking about that company in China. I've never heard of that company in China, what do they do? How can I find out what they do? So yeah, people do tend to be risk averse to use that term when it comes to investing in emerging markets.
But also, I think, it's quite difficult to be across everything, isn't it?
And I think if you're investing and you're taking responsibilities for your investments, then you need that knowledge, but you can't, you've got the job, you know, if you're not working in finance, you're not looking at this every day, then you you're doing something else.
So you can't spend, you know, hours every week thinking about your investment portfolio.
So you know, what's going on with the UK economy, you're using companies, you can see them in your house on your street.
So I think that is, in many cases, why people have invested in the UK, I think, you know, people have also been mindful of foreign exchange currencies, they've wondered about whether or not that would impact their investments, whether or not you know, they would end up be extra charges.
So I think we need to, I think the fact now that there are so many brilliant funds and ETFs out there, which gives people opportunities for, you know, very small charges to invest in a much broader range of equities. And you know, right across the board, you can invest in commodities you can invest in, in you know, you could think about if you want to invest in, you know, wind power or solar power, these things that in the past, unless you were a private investor, you wouldn't have access to now much more availability for people. And I think it has become more straightforward. And therefore, I think we are seeing a shift but you're right. I mean, you know, for obvious reasons, the UK for a lot of people, it just seems the easy choice.
Peter Higgins 44:37
Indeed. And I'm going to touch on the ESG side of it here if I may as another theme. And you mentioned earlier that you'd be on an oil rig down a coal mine been on fracking sites in America you've been to see Drax and all the rest of it has switched over to biomass.
Now ESG investing Danni, it is the fastest growing segment in the asset management industry. How best.. You’ve mentioned ETFs there and some funds, how best could investors navigate the best long- term thematic opportunities in that segment do you think?
Danni Hewson 45:08
I think people get really nervous about regulation. And I do think that people need to consider that. But I think we have to make this shift, there is no plan b to quote a popular supermarket.
And therefore there will be more investment in this sphere. So if you're putting your money into it, as a long term investment, there is going to be growth, there has to be growth. But I do think people need to be thinking strategically, so looking across geographies, not just putting their money in, you know, French wind power or solar power, because there could be, you know, regulatory changes which impact those investments. Whereas if you've got investments in France than in the US and in the UK, then you're sort of protected a bit from that.
And I also think you need to think about the different technologies, I think battery technology is going to be the game changer here in that the kind of ability to store power, you know, at the moment, if the winds not blowing, then those wind turbines aren't generating. That's why when I used to go to the likes of Ferry Bridge, and you go to their amazing, headquarter bit in the middle, the hub where everything was going on, and they could literally push a button and power, you know, 20,000 homes, one button, 10 seconds, there we go, we've got the extra power, whereas, you know, they're not able to do that with with wind yet.
But I think that is coming, I think, I think it's an incredible area to be investing in at the moment, there is a danger that you put your money into something that actually, you know, never happens, these incredible opportunities, which you hear about, and you think, oh, that's brilliant, we could all have, you know, a small nuclear power station, you know, in our back garden, the size of a football, maybe one day, that will be the case.
But for people, I think you do need to be smart about it. And it needs to be part of people's portfolios. I know that there's been concern over the last few weeks or months, because the oil price has been so high that maybe there will be a massive shift. And certainly, we've seen some of the bigger oil giants dialled back from their plans to decarbonize.
But I think that long term this is going to happen. So it's.. I think you need to look at your investment decisions for this sector in exactly the same way as you would look at your investment decisions in any sector.
Peter Higgins 47:57
Indeed, I mean, you've spoken about the fact you've got two daughters as well, and my daughter's 15. So I'm imagining that you've got two quite vocal individuals in your household that have got a view on all things ethical, green, and ESG related, do you want to share any nuances regarding your two daughters and what their thoughts are about ESG? And all the other stuff that's going on out there in that space?
Danni Hewson 48:19
I have a 14 and a 16 year old, the 16 year olds doing her GCSEs at the moment.
So it's chaos here. Yeah, look, the younger generation is acutely aware of the importance of looking after the planet, you know, I come back home with a bottle of water that I bought from a shop and I get a bath for the dolphins, you know, they understand the need to protect the environment in a way that is just rooted in them. So I think that that is also something that all companies have to be aware of.
Because if you're looking to employ the brightest and the best, even now, younger people are asking about what companies are doing, what are their ESG policies, what are their plans to decarbonize? You know, what are their plans to make sure that there is diversification in the workforce? It's, it's not just about the environment. It's about making society better. And I think that companies have to be hyper aware of that, particularly in this day when we've got social media.
It is so easy for a company to be you know, targeted by a social media campaign because they have done something that somebody perceives to be wrong.
So companies need to be on the front foot when it comes to this. There's so much education going on in schools about this that yeah, I mean, my two, they will not use some of their by an awful lot of fast fashion.
But they're also deeply concerned about who makes the clothes. They're all deeply concerned about, you know, where those clothes then go do they go to landfill, they are now talking about, you know, buying pre-loved looking and things like Vinted. It's, but it's a mix. I think they're much better at sort of navigating that path than we are.
Peter Higgins 50:22
I've really enjoyed that reply. Thank you ever so much.
I'm conscious of the fact you're on here for quite a while now, Danni, I've got two last questions for you.
And I'm going to use your own words here. But this first one, you describe yourself as being a Yorkshire lass. Yeah. Which you know, I'm a northern guy.
So that so that this resonates with me, please, can you share your thoughts, Danni, I mean, it's very important.
We talked about inflation without really going into depth with it about your thoughts about the north south divide, and how that actually has materialised itself regarding, you know, some places are saying, I don't know, does not see a feeling of recession.
But you know, Yorkshire, you know, Lancashire, it's mills, it's coal mines, they've had various periods of real flux, and you know, difficulties but for some people meh, nothing's happened really.
Danni Hewson 51:09
Yeah. I just remember, a few years after the financial crash, and the UK was no longer in recession.
And I was talking to I was doing politics at the time. And I was talking to a number of politicians who were sort of saying, well, you know, because I'd use the word recession.
So we're not in recession. And I said, well, you might not be in recession in the south, but here in the north, you know, we were still in recession, we still feel that nothing has changed.
And if you would talk to people on the streets, they would say, well, you know, our standard of living is gone down, it's not improved, you know, we're not seeing cranes on the skyline, we're not seeing investment in new jobs.
So I do think that there is often a disconnect between what people outside of the sort of M25 Circle feeling compared with what's going on inside that circle.
So I think it's really important as well, that you have a really broad circle of friends from different backgrounds that are lucky enough to have that, but just in terms of, of doing the job to know how people are experiencing different things in different ways.
And I know a lot of moms who are really concerned about where they're going to find enough money to pay for the week's groceries.
That's sort of one level, I've also got a huge number of friends who have mortgages that are coming up for renewal, they were under a two year fixed rate that was affordable, the amount that they are facing pain, of course, this isn't a north south thing.
This is a UK thing. And they're looking at the new payment, and thinking, you know, can't put into words what that is going to do to the household finances.
So I think we are in a really difficult precarious situation. And I do think that there is the potential for things to get an awful lot worse for an awful lot of households before they start to get better.
You know, inflation is the price of everything has gone up and the price of everything keeps going up.
You know, this this time last year, I got the letter through the door from the milkman, saying that, you know, the milk prices were all going up. I've just had another letter, you know, tuition for the kids has gone up their extracurricular activities, all of that has gone up last year, and now this year, and things that maybe hadn't gone up last year are now going up this year.
It doesn't matter what Hugh Pill says about not passing on price increases, not asking for wage rises.
The reality is that for some people, they were able to deal with those price rises for 12 months, but they've gone on too long now.
And something's got to give and if you are in an incredibly lucky position where maybe you can only have one holiday this year, then fantastic.
But there are a lot of people who are in a position where maybe they can't eat today. And I think it's really important to understand that it's not just a headline, this is the reality of an awful lot of people's lives.
Peter Higgins 54:46
Indeed, so very well said that any financial health is so very, very, very important. And it's overlooked often by people that aren't haven't experience the difficulties ever.
Danni Hewson 54:58
Yeah, and I do think that education has a huge role to play, you know, we're talking about financial health.
But, you know, my kids are doing their GCSEs. But they haven't been taught anything about how a mortgage works, how compound interest works, you know, about debt, they've not had those lessons.
And it's overwhelming to say, well, those are the kinds of lessons that you should teach as a parent.
But for some people, they've never had those lessons, they don't understand it.
So to say to them, you have to explain to your kids about these, buy now pay later loans, that you when you're buying something, you sign up, you get four or five different buy now pay later loans, and then suddenly, you realise how much money you've got to pay this month.
And, you know, there's way too much month at the end of the money, when you suddenly realise that you've got all these extra payments.
And these have huge impacts then on your financial life. And I think people don't understand as well, how long a black mark on your finances takes to shift.
You know, if you're wanting to get a mortgage in a couple of years’ time, you need to make sure that your finances on paper look good, because otherwise you're going to struggle in two years’ time.
So I think there is an awful lot that needs to be done to explain to kids at school, about the importance of finance, about the fact that, you know, they may think that 65, 68 is an awfully long time away when they're 18 years old.
But if they decide not to take out a Netflix subscription, and instead put that money into a pension at 18, can you imagine how much better off they will be when it comes to retirement age.
And it's not about big amounts. It's about starting early, even if it's starting small, but it's about starting. And I think that we do need to talk to people about that, you know, investing is for everybody. It's not something which only benefits those people that have money, those people have money because they've invested in a lot of cases. So I think that there's a big piece to be done in schools.
Peter Higgins 57:27
Indeed, brilliantly answered there. I'm going to ask you one final question, I’m conscious that I’ve had you on for absolutely ages Danni and this is a very, very last question.
And you've covered it, I think already, but just to reiterate some points. What are you most passionate about changing for the betterment of all investors, young and old?
Danni Hewson 57:44
Now that is a hard question. I think it has to be transparency and clarity. I think it is about changing some of the language so that people when we're talking about investing, they don't think that it is something which doesn't apply to them.
I think people get really scared by finance. They get scared by numbers. You know, we've just heard the Prime Minister talking about the fact that he wants people to study mathematics to the age of 18.
I think there will be rebellion in my house if they had to study for more mathematics past the age of 16.
But I think he does have a point, you know, we need to be more financially literate. And I do think that there need to be more resources available to help people make the most of their money, it's their money, they should be able to know how to make it grow and how to make it work hard for them as hard as it can do.
Because it's not just a secret that one or two people should know about. It should be something that everybody gets to take part in.
Peter Higgins 59:02
Love that reply. Thank you ever so much Danni. Thank you ever so much for coming on the show as well. You know, I know how busy you are. You've got your Money Matters one as well.
And sometimes you’re on the Shares Magazines one as well. And you've got a new podcast, I believe as well.
Danni Hewson 59:16
Yes. So we do a Money Matters podcast, which goes out twice a month. And then of course, we do the Money Markets podcast, which goes out every week.
That's along with Dan and Laura co-hosts that and I've also done a number of other things as well.
So I've just been doing a podcast with Vinci Energies called The Big question.
Yeah, which is just fascinating about EVs, about fusion, about battery storage, you know, all those massively important questions about energy security.
Yeah, I'm learning a lot, but then, you know, I think that's what makes life interesting.
Peter Higgins 59:58
It does and I’ll be tuning into The Big Question going forward.
Danny Hewson, Head of Financial Analysis at AJ Bell, thank you ever so much for joining me on the Investing Matters podcast, and I will hopefully when I'm passing across the Brighouse give you a shout one day. Well, I'll take you for a beer or a proper northern pint.
Danni Hewson 1:00:18
Yeah, I'm not a fan of ale, my husband is the ale drinker. But yeah, I'll, I'll definitely treat you to one.
Peter Higgins 1:00:28
Okie dokie, take care. God bless you. See you soon.
Danni Hewson 1:00:31
Thanks Peter.
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