Thursday 12 May 2016
An interview with financial industry heavyweight, Chris Cuffe
Thursday 12 May 2016
Chris Cuffe on gratitude, growing a business and the chasm between good and great
Over the course of a career in wealth management spanning more than 25 years, Chris Cuffe has cultivated his own personal brand of wisdom. Be it building a business from a staff of three to a 1500-strong team or working in the not-for-profit sector, Cuffe’s signature approach in a high-pressure environment is to play the slow game. Perhaps it’s this attitude that’s also enabled him to weather a few storms.
“I do two things essentially: help people make money and help people give money away,” he says. On the money making side, Cuffe is chairman of Uni Super, Australia’s fourth-largest super fund. He’s on the board of Global Value Fund and an unlisted financial management company. He advises three separate families on investing, and has established “Cuffelinks”, a web site and weekly newsletter sent to 30,000 subscribers each Friday. “It’s been phenomenally successful,” Cuffe says.
Balancing his commercial interests, Cuffe is founder of Australian Philanthropic Services, supporting wealthy families and individuals who seek deeper engagement in philanthropy. He finds it immensely rewarding. “If you ever get the opportunity to start something in life and it comes off, you get a great deal of satisfaction,” he says. He also runs an Australian equity fund – Third Link Growth Fund – that uses a collection of hand-picked fund managers. The fees he earns from Third Link Growth Fund, Cuffe gives to charity. “The whole idea was to create something that investors value, get above average returns if I could achieve that. And at the same time, be able to give to the not-for-profit sector. Plenty of investors would invest in it because it’s a good investment, but plenty of investors also like where the fees are going,” he says.
Finally, Cuffe works with Primary Ethics, a NSW-based education initiative in primary schools. “It’s for the kids who, for whatever reason, don’t go to the one hour a week of structured religious education,” he explains. “They now have an alternative which they never had in the past. It’s a very well-structured ethics class: world-class content that’s been developed over a long time.”
In a career that’s seen some ups and downs, Cuffe views his professional life in bright colours. “I look at the world as just swirling opportunities,” he says. “And depending on your character, whether you’re able to just try and grab one of those, and give it a go, is probably the true meaning of being an entrepreneur… I would have no regrets about [taking] the same journey, but there was a period some years ago when I was roasted in the press.”
I look at the world as just swirling opportunities…
Cuffe is referring to the 2003 Commonwealth Bank disclosure upon his exit from Colonial First State, of more than $32 million paid to him following CBA’s acquisition of the wealth management business. At the time, it was said to be the largest payout to anyone in business.
“I was the front page of every newspaper in Australia, and every current affairs and news bulletin for about a week in early 2003,” Cuffe recalls. “There were all sorts of misleading connotations. It was a very uncomfortable period of time for me and my family. But you know, the flip side of that… after the wounds had healed a bit, suddenly a lot of people knew me. On balance, I think they knew me for good things.”
So what did the experience teach him about being a high-profile person in business? “I always think reputations in a career sense are very fragile,” Cuffe says. “A reputation builds up like drops going into a bucket of water: slowly, the water fills. But you can kick the bucket over and kill the reputation in five seconds if you’re not careful. I’ve been lucky to have a following of people who have some admiration for what I’m doing. I always feel very grateful for that.”
Cuffe’s investment strategy is a long-term one. “I just don’t care at all about three months, or even three years,” he says. “I’m aiming at five years minimum. Probably longer.” His reason for this approach is simple. “Investment markets go up and down all the time. A lot of fear and greed drive it. It takes a while to see proper strategies come through and judge them clearly.” Cuffe’s sympathies also lie with CEOs in the corporate world, pressured to account for short-term results. When analysts, fund managers and press are nipping at the heels of corporates to reveal and explain quarterly results, he says, “It completely bastardises what a good corporate should be doing. They should be planning long-term.”
How best to structure a company at different stages of growth provides a challenge that has always interested Cuffe. Colonial First State, he says, was “a journey of continual re-adaption. The way you configure a company with 20 people is different from 100 people, is different from 1,000 people. You’ve got to adapt your leadership style, depending on the size and stage of the firm.” Good leadership is paramount. “People are going to watch you as the leader or the boss. You set the tone; it’s vital to walk the talk. I believe in calling a spade a spade. [Then] if something’s wrong, you’ve got the environment where people are encouraged to tell you bad news... Praise people, give them a lot of rope, plenty of trust.” That’s how a company builds culture.
“You can’t manufacture culture,” he warns. “You can’t put a sign on the wall and say, ‘We are that’. People will work extraordinarily enthusiastically and hard for you if they understand where things are going and they feel a part of it and are appropriately rewarded in both a monetary and non-monetary sense.” How does he describe non-monetary reward? “Keep them informed. Tell them what’s going on,” Cuffe says. “Regular staff updates. Once a quarter at Colonial we would get everyone together in a room. By the time I left, I’d hire out Darling Harbour for 1,500 people. And it was to tell them what happened last quarter. We’d have staff awards, people up on stage recognised by their peers. It is so, so important. I think people sometimes underestimate the importance of that.” For larger businesses in various locations, he’s a fan of webinars.
The fast-moving digital landscape is impacting financial services as well, with the arrival of robo-advice. Cuffe embraces robo-advice as an opportunity to make advice accessible to more people moving forward. Robo-advice can bring costs down, doing what he calls the “donkey work”: capturing basic information about a client. But the human element, he insists, won’t become redundant. “The actual valuable advice bit will never be replaced by a machine,” he says. “It’s a funny commodity, money. [Clients] need someone to hold their hand, to explain what’s going on.”
For Cuffe, money management is a slow game. “A lot of the results of good money management doesn’t come out for years,” he says. “It’s like going to the gym… the future benefit as much as today’s benefit.” When meeting with a potential client, Cuffe is quick to emphasise this approach. “The more mature you get, you realise there are no short cuts. Patience is really important… Slow money is better than quick money. Slow money should have fewer accidents.” Nonetheless, he believes the investment world improves all the time. “Every now and then there’s a cleansing, there’s a bit more law, these days more education is required,” he says. “All that’s got to be good… With our level of patience, some people want it to be perfect now. But we’re getting toward it.”
Slow money is better than quick money. Slow money should have fewer accidents.
Patience is much of the reason why Chris Cuffe places such value in great wealth advisers: for him, it’s a question of professionalism. Training, maturity and real world experience go a long way to building an outstanding financial adviser. “Some grey hair genuinely helps!” he says. A knack for explaining investment terms in plain English doesn’t hurt, and an adviser should always work for their client, not themselves. “The best thing many advisers could do is spend time with great advisers and learn the difference between competent and excellent,” Cuffe suggests.