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Following is the full transcript of CNBC's exclusive interview with Martin Gilbert, Co-CEO of Standard Life Aberdeen. This interview broadcasted in Asia on Friday, 15 September from the 2017 Singapore Summit.
All references must be sourced to a "CNBC Interview".
Interviewed by Amanda Drury, Contributor, CNBC.
Amanda Drury (AD): Let's talk North Korea first of all, which has fired off another missile test. And naturally, people are asking themselves and their portfolio managers questions like, should I get a little more defensive should I change my strategy? What do you think?
Martin Gilbert: I think probably just ignore it at the moment. I think it would be wrong to have any sort of kneejerk reaction to your, to peoples' portfolios at the moment. So our view is, let's just keep investing as we normally do.
AD: You say ignore it at the moment. At what point do you stop ignoring it?
Martin Gilbert: Well, I think if it gets more serious, you obviously have to take it, you obviously have to look at it but as I say, at the moment, I wouldn't do anything – just at this precise moment in time. I hope those words don't come back to haunt me in the future.
AD: Yes, we're going to play that soundbite in the future when things really go to hell in a handbasket! Talk to me about being a co-CEO. Do you think this is going to work or is it just too many cooks in the kitchen?
Martin Gilbert: No it works pretty well. I mean, we get on very well. In fact, it works very well. In fact, I wish I'd had a co-CEO before. We're different sort of personalities and we've got different interests. So Keith is especially strong on actually running of the asset management business, the asset allocations, all those sort of things. I'm probably more externally focused. So it's a good combination and its nice having someone to bounce things off because being a CEO is quite a lonely job so now, you know, at least you've got someone to speak to.
AD: Indeed. You've said that your new global giant is going to be a UK financial services champion. Something that is particularly pertinent in the light of Brexit and what that could do to the reputation of London as a financial services centre. How does Brexit change things for you at the company?
Martin Gilbert: Yeah, not much. I mean, asset managers always… The big asset managers always ran their European operations out of Luxembourg. We always had European funds run out of Luxembourg and UK funds runs out of London. Or European funds run out of Dublin. So it really doesn't change very much at all. For the life part of the business, they had branches in Germany and Ireland so they will set up a new subsidiary in Dublin to incorporate those two branches. So slight change for them but for the asset management side of the business, no real changes at all.
AD: But with the increasing focus on Dublin, in order to cater to your EU customers, does that take away from London at all?
Martin Gilbert: No, not really. I think it's… it would be a handful of people affected by it. And the same with the banks. The banks are probably the most affected so companies like Barclays are going to have to set up a new operation subsidiary, again in Dublin, I think they're going. So, I don't think it's going to have a huge effect on London.
AD: Has the government asked for your advice at all, in the Brexit process?
Martin Gilbert: Yeah, obviously Prime Minister May has had meetings with myself and other representatives of the assert management business.
AD: What did you say?
Martin Gilbert: We just outlined what was important to us, which is a period after the two years – a transition period. And she understands the issues. She also understands how important financial services is to the UK. But it's a typical situation. What a politician will say to you in private and what they say to you in public are often two very different things. She definitely gets the importance of it.
AD: Talking about your first priorities for this newly merged company.
Martin Gilbert: I think just merging the businesses – I know that sounds a glib answer but we really have to put the two businesses together now to form one business. Really try to make two and two make five rather than two and two make three. So that's what we're concentrating on at the moment. Just looking at which teams are moving and where they'll be based and which offices (they'll) be moving into. Just those sort of mundane things that you need to do.
AD: Increasingly, individuals are having to take responsibilities for planning their own retirement, as governments are… they're burdened and they're having to step away. Companies are also increasingly stepping away. How does that change the kind of investment offerings and capabilities that you give people?
Martin Gilbert: I mean, very… it changes it a lot. First of all, it's very good for the fund management industry, as people are having to provide for themselves. But it means you have to go down much more to the individual rather than, as we tended to be, very much in the defined benefit market rather than the defined contribution market.
AD: Very, very quickly, one of the themes here at the Summit is going to be the role of AI in all the industries that have been represented here. As asset managers themselves are being taken out of the picture and automated, can a machine do what a human does in asset management, better or worse?
Martin Gilbert: No, it can't do what a human does in active asset management. It's already replacing humans in smart… in beta or passive but certainly in active, luckily for the fund managers, they still have a future.