“So what was the actual catalyst for your latest little venture?” I asked the chairman of the insignificantly-sized investment company Kermitted Asset Management when I saw him last week. “I mean, I get what attracts you about ESG as an investment theme – that is, the apparent promise of an unprecedented level of largely uncritical and pretty much limitless demand …”
“The phrase you’re grasping for is ‘inspiring people to set about averting crisis by embracing opportunity’,” the chairman corrected me. “Silly me,” I nodded before ploughing on: “Not to mention, of course, the whole ‘shiny new world ripe for exploitation’ element that has underpinned your entire career …” “And this time I think you were after: ‘Because there’s no point saving for the future if there isn’t one,” the chairman interrupted again.
“Crikey,” I said, almost impressed. “I see you’ve been following your standard business model of sorting out the marketing before you have anything to market. Still, don’t you think you’re laying it on a bit thick with the fear factor?” “Nonsense,” snorted the chairman. “Surely even you must be aware that 95% of investment is driven by emotion – and 100% of that emotion is fear.”
“I thought it was more of a 50/50 split between fear and greed,” I replied. “That is one train of thought,” the chairman conceded. “But think about it properly – bear markets may be driven by fear of losing cash but bull markets are driven by fear of missing out. The average punter will have their dreams of becoming rich, sure enough, but the idea of everybody apart from them becoming rich? That’s the stuff of their nightmares.
“And there’s actually a decent parallel here with how we operate in the wonderful world of investment – of course, we fear the consequences of our sales and marketing efforts backing the wrong funds or, within those, our managers backing the wrong stocks. But I promise you, nothing keeps us awake at night more than the fear that the opposition eats our lunch.
“That is why it is so important to keep ahead of the game in this shiny new world ri … I mean, at this existential crossroads for our planet. And it is why it seemed only logical that we should play a whole new fear card as part of our investment marketing strategy – the not unreasonable and, one would like to think, really quite motivating fear of planetary extinction.”
“Wow,” I whistled. “As always, it has been a not unenlightening, if really quite disturbing, insight into how your mind works. I do, however, have one question – you may be looking to instil a third fear into the average investor’s store of emotional biases but, to my eyes, the wonderful world of investment has always had a third fear lurking in the shadows.
“In addition to fear of messing up and, as you describe, fear of missing out, fund groups have always nursed a pretty healthy fear of slapped wrists. Surely the FCA’s not going to be that impressed with a fund marketing campaign whose underlying message is ‘Buy now while the world lasts’. “While … the … world …lasts,” murmured the chairman as he scribbled a note to himself.
“Listen,” he continued. “The workings of the regulatory mind have been something of a mystery to me for as long as I have been in this game – and I flatter myself the dear old watchdog feels the same way about me. But one thing of which I am certain is that the FCA has its own share of fears too – and these will now include a fear of not being seen to do everything in its power to further the ESG cause.
“As I told you last time we spoke, we are dealing with the first investment trend in the whole of history that does not have – is not allowed to have – its doubters, contrarians or sceptics and I really cannot believe the FCA was planning to be the first. Now, you were saying something about a catalyst?” “I was,” I nodded, “but we appear to have become side-tracked and run out of space – sorry, time. I’m sure it will keep to our next meeting.”
