The London South East, Investing Matters Podcast Episode 9 Charlotte Ransom, co-founder and Chief Executive Officer of Netwealth

LSE 00:01

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Peter Higgins 00:18

Hello, and welcome to the London South East Investing Matters Podcast. My name is Peter Higgins. And today I have the pleasure of speaking with Charlotte Ransom, the award-winning CEO and founder of Netwealth, the wealth management service. Hello, Charlotte, how are you today?

Charlotte Ransom 00:36

Hi, Peter, feeling great. And happy to be here. Thanks for inviting me.

Peter Higgins 00:40

Thank you for coming on. And so a way to start if I may. Firstly, I'd like to take this opportunity to congratulate you on the award of one of the 2022 PAM 50 most influential for the fourth year in a row at PAM Insight. So please tell our listeners about the award and the prestigious nature of it?

Charlotte Ransom 01:05

Well, PAM have been around for a while and probably recognised in the wealth management industry as being the kind of the leading group in terms of their assessment of what's going on in the wealth management industry.

And I was actually delighted to be awarded this recognition again for the fourth year in a row because Netwealth is five and a half years old. And if you look at the other people in the PAM Top 50 they tend to belong to the kind of incumbent crowd. And what I'm pleased to see is that Netwealth is rubbing shoulders with the sort of the greater the good of the wealth management industry. And hopefully every now and then also giving them a little bit of a push in terms of the direction that I feel wealth management needs to travel in.

Peter Higgins 01:55

Absolutely. And as we're going to speak a bit later about how sought after as a thought leader, you are in the industry at the moment. I want to start if I may, and go back a little bit about your journey. And you started obviously, at JPMorgan then spent 20 years at Goldman Sachs serving as a partner for 10 years. But please share with us the different leadership roles that you had responsibilities in your greatest lessons whilst there.

Charlotte Ransom 02:17

Yeah, so I spent five years at JPMorgan having graduated as a modern linguist from Bristol. And so I was already probably a little bit unusual. From the point of view, I was a linguist from the point of view of being female when I got to JPMorgan in 1987.

And actually, I was astounded by how quickly I just slotted in and really enjoyed the environment that I was in, probably most particularly because it was very meritocratic. And the really good news for a young person coming into a business is when you can just demonstrate, you know, your impact quickly. And that was something that was possible to do in investment banking.

I was headhunted by Goldman Sachs in the early 90s, into what was then a fledgling derivative business, and I was basically head of Southern Europe, which meant I was head of myself, I had nobody reporting to me, we were very much considered to be the sort of, sort of, I wouldn't say cowboys, but definitely the pioneers. So, you know, derivatives at that stage was really not well understood as an asset class as an activity. So during the course of the 90s, and the naughties, I ran various different groups, that very quickly became established as some of the biggest revenue drivers in capital markets in investment banks, and Goldman Sachs was right at the forefront of a lot of the innovation.

So it was a fantastically exciting time to be in investment banking to be in that sector of the market. And I was also lucky because as a linguist, obviously, I didn't have naturally in mathematical background. But growing up, as the derivative markets grew up, we kind of evolved together. So it meant that I was really at the cutting edge of innovation, for you know, those two decades. And then my last five years at Goldman, I moved into private wealth management. And as you mentioned, I was already a partner by then, and I was running different parts of the private wealth businesses, for Europe, the Middle East, and Asia. And that was also a fascinating time just looking at the difference between an institutional client versus a private client.

And so somebody's actually thinking about their own money rather than managing money on behalf of an institution. And then the cultural differences which were also fascinating in terms of just what people are looking to achieve with their money, what sort of environment they used to operating within and what they're expecting from people servicing them.

Peter Higgins 04:50

Absolutely wonderful reply there. Thank you for that. Now, on leaving Goldman Sachs, you took some time out, are you looking at all the different innovation and fintech was you know, on the cusp of starting out and all the rest of it, and you're like, something's not quite right here, I may need to make a difference regarding the wealth management industry. And you went away and you thought, hmm, maybe I should set something up myself, because it's just what's what's needed is not out there. You know? So tell us about how you came about launching or sorry, founding first, then launching Netwealth, and the different heavyweights that back to you, I've got some names here, which I'm sure you're going to share with us?

Charlotte Ransom 05:29

Yes, I mean, so first of all, you mentioned that I spent a bit of time investigating different types of technologies. And, you know, one of the kind of fascinating moments for me was when I was sitting in a meeting for an online food delivery business where I was acting as a sort of advisor. And, you know, we had a fascinating hour talking about how to pack the lorries and how to help them deliver to more people.

And I was genuinely interested in the discussion, but I came out of it thinking, you know, I didn't add a sense of value in that conversation. So I started to realise that my natural home was in finance. And that coincided with the fact that for the first time, in 25, years, I had some time on my hands, I wasn't working flat out, I was able to sort of take a step back and think about my own finances. And there was this very troublesome moment, when I remember sitting in our office at home with my husband and saying, you know, here's the problem, you know, we've been lucky enough to be, you know, we've worked very hard, we've made some money. And now we either have to manage it ourselves, or we need to go and find someone to manage it for us. And from what I know of the wealth management industry, I don't want to give it to anybody else.

And we were sort of throwing this around a bit. And then we came to the conclusion that you know, what, we probably it's the time to try and address both management, think about it in a different way. And so that was the very early seeds of Netwealth. I then managed to regroup with Tom Salter, who's my co-founder, and we'd work together at Goldman Sachs, where he had the majority of his career at JP Morgan. And we, you know, we're a decade difference in age or children's span, a couple of decades, between the four I've gotten the three he's gotten. So we really started to think about, okay, so for people who are most likely come from a background a little bit like us, in other words, they're educated their time poor, they're probably analytical from the point of view of they have some sense for what they might expect to get from their money.

But they're also unlikely to want to be doing it themselves, given the time constraints, maybe compliance constraints, and so on. But they're also a bit cynical, and they realise that things can be done differently. And that was, we were really projecting our own sort of personalities and issues into that descriptor, but it's fascinating, because when we launched Netwealth, and we were thinking about those were typically some of the personality traits that we expected to find.

And I would add into that, actually, conservative was the other trait, meaning people who have earned a certain amount of money are looking to, you know, keep that money, grow it and will probably expect to continue to earn money over time. So that, really, they're looking for a way to let that money develop, but without taking huge risk with it.

So it's been really fascinating to see then, okay, the service is developed around a set of personalities like that, what we write, you know, does it appeal to them, and you know, who else might have it have appeal to, and so on. And when I was looking to finance the business, and so we we founded it in 2015. And we launched in the middle of 16, a month before the referendum, which is a kind of fascinating time to launch a business.

You know, I decided very deliberately right from the beginning that I would want it to have a group of shareholders who felt as passionately as I did, that wealth management needed to take a pretty dramatic turn for the better.

So I was, you know, I was very lucky, I've spent 25 years in the city. So I had a pretty long group of people who I've known for a while and either worked with or had come across. And they were very quick to understand what it was we were trying to do and to recognise, you know, why it needed doing. And so I have been very, very fortunate with the shareholders that we've had, and they've been fantastic in terms of their ongoing, you know, backing of the business and interest in the business. And I think it's, it's very telling, because if you have a set of people backing the business where this is something they live and breathe themselves as consumers, then it really tells you that you're doing something right.

Peter Higgins 09:50

Absolutely. And you know, you've got Michael Spencer now Lord Spencer of Alresford and Stuart Rose or Lord Rose of Monewden, and others on your, on your list of people that have backed and stayed with the company throughout, you know the past while going on to nearly six years now. So you've had a phenomenal response, and you've had phenomenal growth as well, Charlotte. But before we talk about the growth of the company, I want to talk about the essence of Netwealth and how it differentiates itself because it's got a unique hybrid wealth management, technology enhanced service.

So I'm going to explain to people why that differentiates and why it's different, and also better?

Charlotte Ransom 10:35

Yeah, thank you. You know, it was very interesting when we were coming up with with the service model we felt would resonate. And as that we thought would resonate for us as well as for others. We were very conscious of the fact that there was quite a big movement in the US, and actually a fledging movement as well in the UK around Robo advice. And so there were quite a lot of services that were very focused on being sort of technology first and foremost.

And Meantime, at the other end of the spectrum, there were the sort of classic wealth management companies that had been doing their business for decades, if not centuries. And really the way we have positioned that wealth. And the way we've always modelled the service is actually to keep, what are the best parts of a traditional service. So for me, there should never be any compromise on for example, you know, the pedigree of the people looking after the clients and the money, there shouldn't be any questions around there being people observing the asset allocation, making decisions around asset allocation, and to some extent, having active asset allocation to make sure your money is being looked after by people who are living and breathing, you know, that particular purpose every day, having access to human advisors, again, absolutely critical.

I mean, I'm a firm believer that, you know, in private wealth, we all have individual issues and questions and, and dynamics that are specific to us, and therefore the human aspect should never be underestimated.

And then the other thing, which is absolutely clear, is that if you're talking about wealth management, you really want to know that your data and your assets are secure. So I kind of felt those were the four principles that we wanted to lift from the traditional wealth management industry, and that we felt was absolutely central to any proposition, then what's very exciting is when you take that and you embed it into a brand new technological framework, and suddenly that just brings alive and differentiates the service dramatically, because all of a sudden, you have now a platform, which is completely comprehensive to start with.

So you can give your clients access to all of the things they might want, you know, whether it's pensions, or ISA, or corporate accounts, or charity accounts, you might want to be able to do it not just in Sterling, but in Euros and Dollars, for example.

So having something which is really user friendly. And at the same time technology that lets clients, I always use the term get closer to their money that lets them understand what is happening to the value of their portfolios as of last night's close, what's my value? Why is it gone up? Why is it gone down? What is it that I'm invested in? And absolutely critically, how much am I paying for that service? And so then the other, you know, fantastic thing about technology is it has allowed us to take the cost down dramatically. So we're typically anywhere from a third to half the cost of traditional wealth management. And that's even when you build in the price of offering advice.

And you know, this, this question around advice is a really, I think, fascinating one in the wealth management industry, because I actually genuinely believe that where advisors offer, the most value is around advice, rather than around their capabilities in terms of asset management. But I also think that as consumers, we often don't need advice on an annual basis. And so the fact that so often baked into the overall fee means that people overpay for the service when they think back quite often. If you're properly set up.

You know, you don't need to be told do your ISAs right, you know, okay, I've got to top up my pension. If there's still room I need to do my ISAs. And that may be all you need to do, you know, for several years, and then there'll come a time when actually I do need advice. You know, I'm retiring, I'm getting divorced, I've had inheritance, something's changed in my life, and now's the time that I needed it by, so again, another sort of differentiating factor about Netwealth is as you said, we've always been hybrid. So you can do the entire thing online if you want and, and have an entirely digital relationship with that wealth. Or you can come through via either investment guidance or financial planning advice depending on which route you want, and you can chop and change that as your relationship with Netwealth evolves, so that there is always going to be the potential to access humans. And as I said at those particular catalysts, those moments in your investing career, if you like that you can get the help that you need.

Peter Higgins 15:19

Thank you for that reply. And I was going to ask this a bit later on, but I'll ask it now. And it's quite important, really, Charlotte, prior to the pandemic, some wealth management providers were rarely sitting down with clients, and doing face to face meetings.

Some would reluctantly, then go online and enabled online interactions with them. But obviously, you guys were always online, always digital. Now, I'm going to make this assumption, you can correct me if I'm wrong, that a lot of those disillusioned sort of clients, were making a pace and ahead towards your your company Netwealth, I'm sure you actually added to your client base during the pandemic, because a lot of clients wanted to get a better service, which had never had before.

Charlotte Ransom 16:03

Yeah, so a few things happened, actually. And so first of all, as you said, our company's always been hybrid. So we've always had Central London offices for people who want to come in and see us, but there were people who would access us fully digitally and everything in between.

So there was no change to the messaging in terms of the network service, we were able to operate seamlessly when the pandemic hit. And, and actually, interestingly, I think from an investment management standpoint, as well, the portfolios did exactly as our clients expected. So they know that effectively working with Netwealth sort of long the market, so if the market goes up, they will go up, if the market goes down, they'll go down.

And they will do that with different degrees of volatility, depending on risk levels that they've they've chosen against their specific goals. But what we found in terms of new clients coming to us, there was some really interesting dynamics, I would say, one of the areas that we saw, the biggest amount of traffic was from people who had been doing it themselves.

And you live through something like 2020. And you realise, actually doing it myself may not be as fun as I thought. And and the fact that our service, the overall cost model is so much lower, you know, sometimes people do themselves because they can't bring themselves to pay the very high fees that a traditional service charges. And so they end up doing something on a platform, which I have to say from time to time, I think people maybe underestimate still how much they pay in total. But it is, of course, going to be lower cost than full blown wealth management.

And what's nice as they come to Netwealth, and they pay either about the same or marginally more, but now they're able to offload that service on to us. So we saw a lot of traffic from DIY platforms. And then the other thing that happened and is ongoing actually, as you probably know, there's quite a fascinating generational shift in the advisor community in the UK.

So there's quite a lot of people who have been advisors for a long time who are retiring, and they may be retiring because of the pandemic, maybe they were thinking they were going to anyway. But one of the things we see and is an absolute trigger for people moving to Netwealth is when the adviser sells his business, or he leaves and he hands them over to somebody else.

They don't necessarily like the fact that they're just expected to sort of just take on this new individual who's now covering them, it's when they start to think, okay, so if things are going to change, I think I might have a bit of a look around and see what's been happening more broadly, among other providers.

And I think that's where, you know, from Netwealth, this is really, really a sort of vital aspect to driving newcomers to us, which is that when people take the time to see what has changed, and what they can now access, you know, the truth is, we are really sort of pioneering a model, which is the way the wealth management industry is moving. But they're just going to do it a lot more slowly.

Peter Higgins 19:03

Absolutely. Now, Charlotte, on that note, I wanted to ask you, what do your clients say they value most regarding your personalised approach that they get from Netwealth?

Charlotte Ransom 19:15

I think it depends. It'll depend who you ask. But I think what comes through strikingly in feedback that I get is they love the technology because they love the transparency and the flexibility that it offers them. So for example, you know, during the pandemic, we had people who wanted to change their risk level, and they were able to do it just online automatically. They didn't have to call somebody, they didn't have to sit down with someone, they didn't have to sign something. It was up to them if they wanted to do that. Or somebody who wanted for example, to switch off their drawing from their retirement pot. They wanted to wait until the market was less volatile again, they were able to do that. So I think it's it's clear that technology is very efficient.

Not people don't join necessarily, because they're looking for great technology is then when their clients and they're consuming it, that they realise how different it is from whatever it was that they were experiencing before. But But I have to add that they always talk about the human side as well. So there's no doubt that having, you know, human advisors, and obviously humans running the portfolios, and being able to address kind of how they're thinking about markets and so on, is is still critical. And I would say that they literally sort of 50/50 in terms of how people talk about what they liked the most about the service.

Peter Higgins 20:39

Excellent. Thank you for that reply. Now, you talked about the risk profiles that you run within the company? Could you expand a little bit for me on that? I think it's around seven that you'd run?

Charlotte Ransom 20:53

That's right. So um, if you look at most discretionary wealth managers, we're all doing roughly speaking the same thing, which to my mind is right, it's, it's as it should be. So we're running globally diversified portfolios, that are spread between equities and fixed income, and then you have different flavours of that mix, depending on what it is you're trying to achieve.

Where we have differed from the start is we've always talked to people about lining up risk level versus investment goals. So rather than focusing on returns, and outperforming benchmarks, we've always talked to clients about what are you trying to do with this pot or with that pot.

So, a classic example would be somebody who comes in and they bring, for example, their pensions, and they have a taxable account. And with their pensions, they're saying, Look, I'm not going to retire for another 15 years or so I've got a really long-term horizon. So they would more likely choose one of the top risk levels to put their pension on so that the pension has the potential, you know, to grow as much as possible during that period. And they know they can withstand market volatility, if that should happen.

So if they're at the top end of our risk level risk level seven, that's 90% invested in global equities and 10% in higher risk, fixed income, like emerging market debt. Now, that same person might say, I've also got kids who are, you know, in school at the moment, and then after school, they'll be at university, there's three of them. And so this is going to be going on for the next sort of 15 years or so. And there's a pot, I really want to just put aside for education for the kids.

Now, this is one that they're going to draw on, on a termly basis. And so they know that was a 15 year process, if you'd like to get their children through the education system, and something that they may end up having to put aside quite a lot of money to fund. If that's what they choose to do, then they're much more likely to want that on a lower level. So for example of that, you know, right in the middle, rest of the floor is 50/50, fixed income equities.

And that's the sort of place that people will have an education fund, where they're both drawing from it on a regular basis, but also have a sort of medium to long-term horizon in terms of how long it's going to last. So a lot of our clients will have different risk levels that line up, as I said, against these different goals. And that's a really intuitive way to think about investing, I think. And, that’s why we ended up with seven in order to be able to sort of address what were the sort of most common, if you like types of goals people had and the sorts of return they would be aiming to achieve over that period. So when we look at the different sets of risk levels that clients can choose from, it's interesting to see that the majority of our clients are in risk levels, five, six, and seven.

And that actually, to me is no surprise. And it goes to this thing called the three pot theory, which is we all sort of live by three pots more or less. And, you know, pot one is our liquid pot. And that's a bit like our current account. So we have our salary and dividends and rental income, for example, if we have that come into that pot, and that's where we are major outgoings are as well. And then pot three is the sort of the illiquid, or the volatile pot. And that's in the UK, it's almost always houses it starts with, and then it might be things like specific fund managers that people really like. And they're prepared to sort of put them bit of money behind them and sort of back that horse or it might be a single stock that they really like, which is obviously much more volatile, but again, has potentially interesting upside if they write about the stock.

And really what Netwealth does is the sort of core what I would call pop to where you're trying to generate the sleepwell money. And so very often what we do is we sort of compliment if you like the pot, one really liquid end, and the pot three high volatility or high illiquidity but potentially higher returns that you're expecting to generate over time. So the fact that our clients are in risks five to seven demonstrates they're trying to get inflation plus sort of two to four and a half percent type of returns, which is which complements those two pots on either side.

Peter Higgins 25:16

Yeah. And with the profiles that they've utilise, I've looked through the records here saying that typically, your clients have outperform the peer group by between six and 10%, depending on across the risk range, so they've done exceptionally well.

Charlotte Ransom 25:29

Yeah, no, we've done well. And one of the reasons we've done well is that, you know, we have a significantly lower fee drag. So over time, if clients are saving, you know, on average, they're saving at least 1% per annum, versus what they would be paying, you know, more traditional managers, and that is starting to show. So, you know, it's some extent, obviously, our asset allocation might be slightly different from the peer group.

But we are not market timers, we're not adding alpha, we're not trying to add alpha, it's all about efficiency, and, you know, transparency and flexibility. And, you know, I've actually been delighted to see that we have been able to outperform. And I think, you know, the other thing, which is just fascinating, as you think about the environment, that as investors were sitting in, now, you've got, you know, rates are at their lowest ever level, you've got inflation, that's moving up and threatening to kind of hang around for longer than we want.

We cannot afford, as financial consumers to pay 1% 2%, every year more than we need to, to have our money managed. Because, you know, in that case, these are negative net returns, you're going to get, you know, the market simply isn't paying enough to be able to cushion, that type of kind of extraordinary fee level. And I'm still astounded by the number of people who come to us and on average, they're paying, you know, anything from sort of one and three quarters percent per annum up to three, three and a half percent per annum.

And, you know, I think the other fascinating thing to me is, it doesn't really relate to how much money is being managed on their behalf either. So you can have very wealthy people who are paying really very hefty fees and similar fees to someone who's got half to a third of their wealth.

So I think just overall, it is still without question, I think the biggest problem that exists in the wealth management industry, and despite the best efforts from the regulators, and from financial commentators, you know, who were kind of pushing on this point around fees, there is still a dominant, you know, trait behind these services that when you add it all up, and this is the thing, you know, people are not always particularly clear about a fee, if they're asked for their fee, they might say, well, our asset management charges this, but they don't talk about and the funds, we buy that and the transaction costs of this. And by the way, there's VAT on top of that, and it's another 20%.

You know, it's extraordinary how it adds up. And it's something I'm absolutely passionate about, because it can genuinely change people's financial futures, by getting this right.

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Peter Higgins 28:32

You've written a few articles about this in the past, I've read yours, essentially saying that difference in 1% compounded over 10 years is 14%, over 20 years. So you're looking at almost £200,000.

Charlotte Ransom 28:45

14% over 10 years, Peter? Yeah, for £100,000, you're giving away £14,000 to someone who you know, you may or may not consider to be someone who would want to be giving that type of money.

Peter Higgins 28:59

Absolutely. And if you've got an average client like you, you've got a Netwealth, who's got £470 to £500,000 invested over 20 years, that's £200,00 over that period of time. That's a difference as well in fees.

So yeah, absolutely phenomenal work that you're doing there. Now on the pursuit of change Charlotte, yourself and I think it's seven of the companies and entities have got together and and established the Digital Advice Group and founded that you're one of the founders have that last year. Can you tell us a bit more about that? Because you're still not happy with what's going on? You want to make that difference? And it's really brilliant that you're pursuing that goal.

Charlotte Ransom 29:39

Yeah, so this has been a really interesting project that I've been working on with Holly Mackay who runs Boring Money and a group first got together to try and think about, which was the area of advice that is probably least well understood, but still dramatically needed and what we felt I want to be careful talking about the advice gap, because I think that is something which is more of a sort of regulatory term, which applies to people kind of across the board no matter what type of asset size and size they have. And it's simply the fact that not enough people take advice, and that it is still something which is quite unattainable to people, whether that's because they don't feel they're the right, you know, they know who who is the right provider for them, whether it's they feel they can't afford it, and so on.

So there is a genuine, broad advice gap in the UK anyway, what we are specifically trying to get at with the digital advisor group is that there are ways to access advice that they didn't used to be. And by that, I mean, as we talked about earlier, traditional advice comes at a high cost, and quite often is provided by people who will also require significant levels of assets in order to work with them.

The idea behind the digital advice group, and there's quite a range of us within that group who offer different types of service in a sort of have a different demographics that we are most suited for. But where we come together is the idea that we all have an element of technology enhancement that allows us to be able to offer advice in different ways for different client groups with different needs.

And that ultimately, it should mean that a much bigger swathe of society sees that they can access advice and pay for it in an appropriate way. And that's really what it's about. So it's really trying to sort of fill that gap if you like, and, and actually be quite broad in terms of the audience that can appeal to because of the people within the group, each lining up against a slightly different demographic of people.

Peter Higgins 31:57

Absolutely fantastic initiative. I mean, what you've done also Charlotte, you obviously you're a thought leader, you're very, very sought after regarding all the wealth management industry wants to speak with you. But what I've noticed as well is that Netwealth, above average, and almost half of your client group are women. And it's so important for women because they're living longer, you know, they're doing all this hard work, they're taking time out for doing the vast majority of different things. And they've got children to is responsible of, and you're helping to make them more aware, get them more responsible for their own monies, and for them to possibly seek out their own financial independence.

Charlotte Ransom 32:34

Yes, and thank you for bringing that up. Because it is something that I am absolutely passionate about. And, you know, as a woman, you know, in finance, I have grown up in a man's world if you like, and I, I didn't really think about it that hard other than when people would express surprise that, you know, oh, you know, you've done that well at Goldman Sachs, or whatever it might be.

And I always felt actually amazingly supported during my career by people who took the time and sort of recognise that maybe there was something there that they could support. But when it comes to women and personal finance, I have experienced what so many women have talked to me about and that is that you get in a room.

And even though I had a background in finance, I might be sitting across the table from people who were speaking in unbelievably patronising tones, directing the discussion sometimes maybe to my husband, and sort of forgetting that I was in the room, and everyone in the room being male, you know, and there was so many different aspects to it, as well as the fact that the language that is used is often very different than the way I think a female consumer thinks about their money and what it's trying to do. And by that, I mean lots of talk about, you know, out performance, for example, and a lot of talk about products, and much less talk about goals and trying to line up those goals, so much more of a transactional type of discussion.

And actually, I've been so pleased to see that about half our clients are women, because in fact, our service, of course, is directed at both men and women. And I think,and I think that we all benefit from, you know, an approach which is sort of goal based and moves away from this very sort of transactional way of doing it.

So, no matter who you are, where you come from, I think, you know, we all have our individual goals and things that we're trying to achieve. And I do think it's something which will be dramatically important in wealth management as we move forward. As you said, it's roughly 50% of society are female. We are also quite complex in terms of our financial lives because we will, you know, most likely end up being child bearers we are more likely to be the ones taking maternity leave so we have time out of our careers we then go back into them.

But our pensions, for example, are obviously affected by the fact that we've been been out of work, maybe for several years during childcare, we then come back into the workforce, we may be paid less than we were before, because we've, you know, been out of out of the out of the cycle for a while, we then quite often are the ones who end up helping elderly parents and supporting them.

So we sort of come back out of the workforce again, or we compromised in some way. And then as you mentioned, we may well live longer than our male partners. So females financial lives are complex. And it's so important that they engage with finance. And up until now, there's been this real sense of, you know, finance isn't really for me, there's that sense of somehow, it's for the kind of other half of society that you get, you know, the other things happening is divorce is prevalent. And divorce is happening later in life.

That's the only thing so that quite often these are women who have children, they need to look after mortgages, they need to, you know, pay down, they need to be thinking about things that are more complex than if they were married in their, you know, early 20s. And then divorce happened before they were 30. So their lives have got quite complicated by the time they suddenly find themselves financially alone.

So it's another thing that we work a lot with divorcees, and people going through these, you know, significant life events. And, you know, I'm just very excited that we're able to have provided a service that does have that appeal. And I'm very much hoping expecting that will continue to be the case.

Peter Higgins 36:37

Yeah, I think it's brilliant, and also within your team, it's important, because what you've got is quite a nice balance. Unlike most wealth management companies have female advisors, you know, it's refreshing that a woman can come into the office, see somebody who actually looks and appears to be like them. It's not a roomful of men, and they're all isolated in the room.

Charlotte Ransom 36:58

Yeah, no, that's right. I mean, it's been an interesting challenge, you know, when you start a business from scratch, to make it, you know, culturally diverse, gender diverse, I mean, really trying to think, okay, I got this opportunity, I've got a clean sheet of paper, I want to do this the right way. And there's no doubt it's, it's more challenging than you want.

So I'm acutely aware as well, that, you know, I want Netwealth to be representative, kind of across the board. And the other really cool thing actually, is that roughly half of our employee base are developers. So people actually, you know, writing our code, putting together our proprietary technology. And right from the beginning, those people have been fully remote.

So roughly half the company has worked fully, remotely ever from, you know, right from the start. And partly as a result of that, but not only because of that, a really significant proportion of our technologists are female. So what was fascinating to me about that is that you take the world of finance, and you know already that that's male oriented, you take technology, and it's even worse.

So I was actually very pleased that it's not just if you like the sort of the front office, or the bit that's client facing that is reasonably, you know, well-balanced, it's actually behind the scenes as well. And, I was very excited to see that we were able to drive that change.

Peter Higgins 38:21

Brilliant, and I'm so pleased for you doing absolutely fantastic job, Charlotte, I want to speak now, because you're the recipient of the 2015 Mary Lou Carrington Award, for your work for Speakers for schools. And I want to speak with you about, you've mentored a lot of young women, and I wanted to get a gauge from you, what's the recurring piece of advice you're giving these young women because you're trying to get them into technology, you're trying to get them to finance, not don't have to go into this, this world of, oh, women are meant to do that young women are meant to go into that field of work.

Charlotte Ransom 38:55

Yes. Speakers for Schools is a great organisation. So this is where external speakers are invited into the state school system across the UK. And, you know, they typically you, you talk about something of your choice, and I tend to talk about the five steps for a successful career. And I'm usually talking to Sixth Form. And one of the things to your point, Peter, about, you know, the sort of the gender difference, if you like, is that I noticed immediately in in a mixed gender room, that the girls don't put their hands up, the girls are holding back and you know, a lot of other guys, you know, hands up, hands up, you know, and I do, I kind of do a little thing where I bring people up on stage and we have a little muck around and we get everyone engaged. And the main point that I like to talk about at the end is to basically get yourself noticed.

So that's the advice that I give both, you know, it doesn't matter who I'm speaking to, you know, the boys or the girls, but I know for the girls, it's just it's often less natural because they're more anxious about, they want to put their hand up and ask a stupid question.

You know, they do want to somehow put themselves out there and, and possibly feel uncomfortable about what it is they've just said. So one of the messages I give people is, if you're paying attention, and you're, you know, you've worked hard, you've earned your seat around the table and you're paying attention, no question you ask is stupid.

You can ask whatever you want. In fact, one of the biggest problems is, as we become more senior in our roles, we start to find it more and more difficult to ask questions, because we kind of figure well, we should know the answer to that. But here I am running a Fintech business. And believe me, I ask a lot of questions about technology, this is not something that I have grown up in.

So that is, my main aim for these youngsters is get in, get yourself noticed. Because one thing that I know for sure, having, you know, being a youngster myself in a very competitive environment, you know, all those years ago, and then growing up and being a leader in various different roles, is that there is nothing better than having a young, ambitious, thoughtful person who is helping you do your job better. And you will always return to them, and talk to them about what you're up to. And you'll talk to them about the impact of what it was that they suggested that you have a look at, or the piece of information that they gave you.

So you're never too young to have an impact. And the more you can get that message across, I think the more likely you are to help those young people become leaders in their own right, you know, different stages of their own careers.

Peter Higgins 41:38

Thank you. I love that reply, that that's run seamlessly to my next question to Charlotte, which aspects of mindsets and psychology have helped you maintain such a rich, varied and successful career, not only in your chosen fields, but also in your philanthropic endeavours?

Charlotte Ransom 41:56

Well, you know, for me, it's all about balance.

A career is a long-term thing you hope. And I know, by nature, I'm a competitive person. So I have always driven myself quite hard. But I have also been absolutely focused on being able to be a wife, a mother, you know, I have four children, I have always been absolutely clear in my mind about making sure that I can be a mother, you know, not sort of shelve that and say, well, in 20 years’ time, don't worry, guys, I'll have retired and then I'll be there for you.

So, to me, balance matters a lot. And actually, I suppose maybe that's one of the things that has sort of led me over time to meditation, which just helps you take that moment, you know, to just sort of reset every day.

And I think, again, for personality like mine, maybe that's not a bad thing to just have that, that moment of quiet. So people do it in different ways. But I think the careers I've seen that haven't worked have been when people are so driven, and often very successful in what it is they're trying to do, but at the expense of other things. So if you can try and find a way to bring balance into your life, I think it makes you better at everything, actually, for you.

Peter Higgins 43:22

Brilliant, and I love that. And I also meditate and follow mindfulness. So I know exactly what you're talking about having a moment of moment of calm and quiet.

Charlotte Ransom 43:30

Yeah, good.

Peter Higgins 43:31

Brilliant, now Charlotte, I've got a final question for you. And I wanted to conclude our fantastic discussion by asking you this particular question. You are among the leading women in wealth management industry, you're driving change, and you're trying to encourage awareness and diversity, what have you seen helped with, or able to happen that you're most proud of?

Charlotte Ransom 43:54

I really hope that throughout my career, and including now with the founding and the running of Netwealth, that I couldn't be a positive role model for people, obviously, for women, but you know, potentially for men as well. I mean, this question of balance applies to everybody. You know, it's not just that mothers want to get back in time to bath their kids will have slept with them, guys do too, you know, so I, what I really hope is that I'm able to show people that you can be normal, you can be kind, you can be happy, as well as, you know, have a successful career in some of the most competitive areas that exist. And I'm a big believer that the companies that have people who do have this level of balance will also do better because the environment within the companies that corporate culture will be better.

You know, it doesn't mean it can't be hard driving. It doesn't mean it can't be ambitious, but it's a sort of long-term ambition and, and it's going to be so much more nurturing in terms of the environment that people operate within. And I think in the end you know if you can have happy people around you who are doing extraordinary things, there's nothing where you can ask for.

Peter Higgins 45:12

I love that reply. That's absolutely fantastic. And all I can do is wish you continued success Charlotte, you and the Netwealth team. It's been absolutely joy, speaking with you today, and I'm looking forward to where we can meet in person at some point. And I'll bring you a bottle bubbly for all your success when I come down to your office at some point.

Charlotte Ransom 45:31

Fantastic. Thanks very much. Thank you very much.

Peter Higgins 45:34

That was Charlotte Ransom, CEO and founder of Netwealth on the Investing Matters Podcast an absolute joy to speak with today. Thank you, Charlotte. Speak to you soon.

Charlotte Ransom 45:44

Thank you Peter.

LSE 45:55

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