The AIC’s Annabel Brodie-Smith: people don’t take enough investment risk

Before the coronavirus outbreak, Annabel Brodie-Smith spoke to Nina Kelly about investment trusts, what fashion and investing have in common, and immersive theatre.

Annabel Brodie-Smith is communications director of the Association of Investment Companies. She has worked for the body that represents the investment company industry for 23 years. For 10 years, Annabel was a trustee of the charity Personal Finance Education Group.

Growing up, what did you learn about money?

I grew up in Wales, in a household where my father worked very hard. He was a solicitor before setting up his own business selling fishing tackle by mail order. My mother was the spender! They were both sensible with money, but they weren’t investors.

I wish that I had learned more about investing and the available options when I was growing up. There were no lessons on financial education at my primary or secondary school.

I’ve always been passionate about education about money. I was a trustee of the Personal Finance Education Group (PFEG), a charity, for 10 years. Their objective was to help young people develop both the confidence and skills to manage their money. Part of the charity’s work was lobbying the government to put financial education on the national curriculum, and now it is. The charity later merged into Young Enterprise.

Who takes care of the money in your house?

It’s a joint arrangement. I look after investments, the mortgage, and payments for the children of any kind, including school fees. My husband takes care of the household bills.

What was your first investment?

I thought I didn’t have any investments before I joined the AIC 23 years ago, but I have since discovered that I had £100 worth of BT and British Gas shares, which my father had acquired for me. At the AIC, I joined the pension scheme and later opened a self-invested personal pension (Sipp).

Pension aside, my first investment was in a global investment company, namely the F&C investment trust, the oldest investment trust, which is 152 years old. I felt that it was a one-stop shop global portfolio and a good stepping-stone for my first investment.

What was your best investment? 

I have a Sipp portfolio, and my biggest holding is the private equity investment company HG Capital. It invests in unquoted companies in the reliable end of the market, in areas such as compliance, financial services, and software.

I’ve always been happy to take risk in my Sipp as I was investing from a fairly young age. People often don’t take enough investment risk when they are young and have time on their side.

And your worst investment?

A Burberry mac, which I bought after getting a rebate from the taxman. I wore it only a couple of times before it was stolen from a box at Sandown racecourse. I never saw it again. I was planning on wearing it for the rest of my life: I tend to wear things to death!

What’s the best thing about your job?

I like helping people understand more about money and investing. It's satisfying to know that you are helping people meet their financial objectives, which are effectively their goals in life. I also enjoy talking to a diverse range of people with a wide variety of views, from fund managers and CEOs, to analysts and wealth managers, financial advisers and journalists.

And the worst?

I hate admin, so probably expenses.

If you could change only one thing about the industry you work in, what would it be?

The attitudes of financial advisers to investment companies, although adviser purchases on platforms have quadrupled from £200 million to £1 billion since the retail distribution review (RDR) started in 2013.

Private investors are very engaged with investment companies, they can see the long-term performance figures, the stability of dividend payments, and they like the “dividend hero” investment companies.

Wealth managers have traditionally been, and still are, users of investment companies, but with the financial advisers we still need to make a breakthrough. We’ve just completed some research looking at some of the barriers to recommendation and they include a lack of understanding, a perception that investment companies are very risky, and the fact that advisers are used to recommending open-ended funds.

Problems in the open-ended property fund sector have been widely reported and I think perhaps the message is getting through that for illiquid assets, an investment company is a more sensible option.

If you had to save money, what could you do without?

I’m tempted to say nothing, but I normally buy my lunch, so I could give that up.

What financial advice would you give your younger self?

Pay off your credit card every month and have the confidence to take investment risk when you are young.

What do you do for fun? 

Horse-riding. In the past, I took part in eventing and show-jumping. Now, it’s hacking, as my horse can’t be ridden because she has a bad back. I spend a lot of money on livery costs and vet fees. One day, I dream of having another horse.

I moved to Oxfordshire about 18 months ago, after living in zone 1 in London for 25 years. I wanted my children to have the experience of growing up in the countryside, as my husband and I both did.

I now enjoy lots of walking by the Thames, which is even better if there is a nice café or pub nearby.

Sometimes, we are even brave enough to do a bit of wild swimming.

I also am a big fan of the Arts. I’ve recently discovered the Creation Theatre company in Oxford, and I took my children to see an immersive production of The Tempest, which took place on an industrial estate, complete with a zombie.

In another life I would be…

Working in fashion, perhaps PR. I enjoy following the fashion industry and watching fashion shows. My favourite designers include Gucci, Prada, and Chanel. Fashion is always changing and looking for innovation, much like investing. Similarly, ESG (environmental, social and governance) and sustainability are themes that investing and fashion share.

Explore more articles in the Women in Finance series.

- Moira O’Neill interview
- Laura Foll interview
- Victoria Hasler interview
- Anna Sofat interview- Anne Boden interview