110. The CEO Magazine - July 2013 theceomagazine.com.au theceomagazine.com.au The CEO Magazine - July 2013 111.

In The OfficeEXECUTIVE InTErVIEw

worthwhile workAs Australia faces a demographic time bomb with an ageing population and increasing life expectancies, the need to ensure Australians are retirement ready has never been greater. Mercer Managing Director and Market Leader for the Pacific David Anderson takes great pleasure in helping Australians secure their financial futures.

Superannuation is an industry riddled with challenges. From its increasing federal legislation to the skews

in age demographics that could have an adverse impact on the future, super is a financial subsector that is often spoken about but rarely understood. However, all the technical terminology and government interference doesn’t detract from the simple fact that superannuation is a service industry and like any good service: understanding the customer’s needs is paramount to success.

Mercer Managing Director and Market Leader for the Pacific David Anderson has never lost this customer focus, and one of his greatest passions is helping clients realise their wealth potential. He finds fulfilment in his position by collaborating with his passionate team to assist people in saving for their future as well as making a difference to their financial wellbeing.

The CEO Magazine: What is your professional background leading up to and including your current position?

David: I spent 11 and a half years at the AMP Group before I was asked to come and join Mercer. When I joined Mercer I said to my wife, “I’ve got some goals for three years and I might stay as long as five, but I’m never staying anywhere for 12 years again,” but

this is my fifteenth year with Mercer, which was sort of unexpected. I started professional life in an administration role at AMP. I joined a small team which organised small endowment superannuation plans for executives and what they used to call ‘key-man arrangements’ for their directors and officers.

I learned my craft in the superannuation space at AMP, starting with that first role before moving into consulting and account management in 1990. It was there my love for working with clients was born. Before I moved to Mercer in 1998, I spent time working with mainly national corporations, Australian subsidiaries of multinationals, as well as a number of foreign governments. I got to do some really interesting work for the governments of Tonga, Hong Kong, and Kazakhstan, as all of those countries were looking at reviewing and reforming their pension arrangements. I then got a phone call to come and talk to Bruce Cook, who was the CEO at Mercer at the time, and I ended up moving to Mercer in 1998.

What attracts you to looking after people on a one-to- one basis?

In terms of my career, one of the things that is really important to me is that the work we do makes a difference to people’s lives. We have a saying at Mercer, “It’s worthwhile work”, and it really is because it’s helping people have a better life;

theceomagazine.com.au The CEO Magazine - July 2013 111.

it’s helping improve their health, wealth, and work performance. I came into the superannuation industry by accident. It wasn’t by design, but I fell in love with it. The work we do changes the quality of life people can afford to have throughout their careers and in retirement as they think about job progression, promotion, earning potential, and being paid fairly; Mercer touches all of those things. On the wealth side, it’s about making sure there’s enough in the pot when you don’t work anymore and ensuring your debts and liabilities never exceed your assets.

We go beyond just looking after people’s superannuation; we help employers educate their people on how to be financially secure and retirement ready, including getting the right level of insurance to make sure they get the right level of treatment if they ever get sick. It is enormously fulfilling to not just help a company protect their most vital asset—their people—but to be part of it in action with their people.

How have you seen the company grow and change throughout your time?

We’re a large global company in 185 cities around the world, and the Australian part of the organisation is now the third largest in a portfolio of 43 countries. Not many multinationals could say that Australia is their third largest market. The core of what’s happened here is that we’ve continued to evolve and innovate.

“The work we do changes the quality of life people can afford to have throughout their careers and in retirement as they think about job progression, promotion, earning potential, and being paid fairly.” - David Anderson

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Through that innovation we’ve been able to shape and respond to the market as well as continue to grow.

That’s the thing that gets me out of bed in the morning and that’s the thing that really drives me and my team; it’s this constant need to keep up with the competition and to outdo them, and in the process you produce a better product for the customer. That’s really the single most important ingredient to Mercer’s success and growth. When I joined the company in 1998, revenues were $70 million and the leadership team was seven male actuaries and a female HR director. But today it’s anything further from the truth. We’ve grown revenues seven fold in my time here and the diversity of our leadership team is incredible and reflects the changes within the company over the last 14 years.

In such a dynamic industry, how is superannuation changing in Australia?

There is a huge amount going on. This federal government spent anywhere between three and five years conducting reviews and consulting with industry, and reforms are now being implemented, so the rubber is really hitting the road from a regulatory reform perspective, and it’s affecting absolutely everyone in the industry. It’s a big deal; superannuation assets in Australia are $1.5 trillion, which is greater than all the amounts on call in bank deposits and greater than the total GDP of the Australian

economy. Superannuation is a big field and it’s continuing to grow; in 15 years’ time we expect it to be three times the size, so there’s a lot going on. We would, of course, like to see less change and tinkering of superannuation in the future and more long-term policy settings to help build Australians’ confidence in superannuation.

How will the industry have to adapt in light of our country’s ageing population?

It’s really a demographic time bomb. We’ve got an ageing population, baby boomers beginning to retire and life expectancy rates improving beyond expectations. More than 50 per cent of baby girls born this year will live beyond the age of 95, and our research into pension and mortality with white-collar public-sector superannuation schemes has shown current retirees are expected to live to 90. These trends will create issues and challenges for our country, particularly if we move from four and a half working taxpayers to every retiree down to two and a half or even down to two in 20 years’ time. How does half the number of people paying tax finance the longer lives of an increasing number that are not paying tax?

How does Mercer ensure innovation through its product offering and internal initiatives?

I guess I oscillate from time to time between wanting innovation

“The biggest challenge is prioritising ideas and putting them through a development process so they can prove themselves and become worthy of investment.” - David Anderson

to be as organised and purposeful as it can be, and then just allowing the anarchy of innovation to drive ideas to inspire people. Most of the innovation of Mercer comes from us serving an advisory role for lots of organisations, whether they are corporate, government, or competitors; we play advisory roles in their product lines. It’s through doing that interesting work on a client-by-client basis and combining it with all of the work done by Mercer consultants from 43 countries that innovation occurs. My job and the role of my leadership team is to harness all those good ideas. The biggest challenge is prioritising ideas and putting them through a development process so they can prove themselves and become worthy of investment.

What does the future hold for Mercer?

There are a lot of things, both internally and externally, that symbolise we’re on the move. One is that we’re opening a state-of-the-art, built-for-purpose facility in Melbourne. It’s going to be enormous, just on the edge of Docklands in Collins Square. It’s a $280-million investment over 15 years and $42 million on the fit-out. It’s about creating the environment for really clever, motivated, and capable people to come together and make magic for Mercer and our clients. We moved in May. We came out of four buildings in Melbourne into this one new centre, which is incredible.

Then there’s the looming retirement crisis. That will keep us busy for a generation. Mercer will be in the midst of this and will rise to the challenge of helping Australians understand what they need to be financially secure in their retirement and how to get there.

One way to predict the future is to create it. We’ve been in this industry for 60 years and this is only the beginning for Mercer.

It takes time to build great partnerships. Our Asset Servicing team understands the effort that goes into creating and maintaining partnerships based on understanding, support and delivering the best possible results to our clients. We’ve continually invested in our partnerships, because we have a long-term commitment to the market and to your fund.

Who understands how real partnerships support Australian funds?

Working together for over 60 years.We do.

We see Australian business.To find out more talk with Suzanne Smith, General Manager Sales & Relationships, T: 0402 152 455

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