At the forefront
Vanguard Asia MD Shelly Painter is taking the lead in a high-potential industry, writes John Brennan.
When it comes to finance, Shelly Painter advises people to think carefully before settling on their long-term plans. However, for the regional manager director for Asia at investment management firm The Vanguard Group, following her instincts and playing to her strengths have certainly paid dividends in her own career.
An aptitude for mathematics led her to enrol in accounting courses at high school, community college and then university while growing up in the US state of Michigan. "Accounting kind of found me," she says. "It wasn't an aspiration of any sort, it was just something I enjoyed and was good at."
She was encouraged in her senior year at Central Michigan University to apply for jobs with what were then the big eight accounting firms. "I got a job in Florida, which was great, and you had to take the Certified Public Accountant exam when you joined a big firm, so I did," she says. "I was studying in the evening and working during the day, and I didn't do too badly."
She worked in public accounting for three years before spending the next three in private industry as an internal auditor. This was when her job choices began to play out in unexpected ways.
"I went to work for a commercial bank, in finance. When this company relocated, I looked around and, because I had small children at the time, joined a local business, Templeton, in mutual funds as head of internal audit," she says.
"This was very fortunate, as I ended up there for 17 years and it turned out to be a really great ride. The week I started, [investment firm] Franklin bought them, forming Franklin Templeton Investments. In that coming together, a lot of opportunities I could not have anticipated were created - for the whole company, and me in particular. The audit side of Templeton was quite small, but it turned out Franklin didn't have any and I got tapped to build it for the firm."
When management consulting firm McKinsey was hired to improve the efficiency of Franklin Templeton's operations, Painter was contracted to the firm for a year. "As a result, I created a job for myself running operations outside the US. Between 2000 and 2005, I was basically the chief administrative officer for non-US business. That was when I got the bug for working overseas."
After returning to staff jobs back in the US, she received a call from Vanguard, who were looking for someone with international experience. "What they were doing in terms of expanding outside the US was very appealing," she says.
But Painter's decision to interview for the job was only part of an eight-month process. "I wasn't even sure I wanted to leave Franklin Templeton - I had thought I would retire there."
However, she joined Vanguard in August 2009. After a one-year stint in internal audit mainly in Australia, she got the call to take up her current position. "Hong Kong is the hub for our businesses in Singapore and Tokyo. When I got here there were four of us and now we are up to 43."
Painter is bullish about the potential for her industry in Asia. "Mutual funds in general are one of the more efficient ways to invest in any sort of equity or bond market, and mutual fund penetration is currently low in many countries - in Japan it is very low and China is just getting started."
While she believes Vanguard's business model gives her company a clear edge, she acknowledges that, in the past at least, this model has kept the company's profile relatively low. "People going into a bank here, say, will not have Vanguard products offered to them because we don't pay [the banks] to distribute them.
"Our costs are on average 20 per cent of those of the average mutual fund because we don't charge a commission to get in, we don't charge an ongoing service fee and we don't pay retro session [the sharing of the management fee] to anyone."
Despite working in an industry that never sleeps, Painter says if you focus on results rather than the clock, it is possible to work in mutual funds and have a life. "You just have to find out what works for you and you have to allow everyone around you to figure out what works for them as well."
She says she never really had a mentor, "but I did have several people along the way who took a chance, saw something and threw an opportunity at me, a project or something.
"I like to think I'm paying that back by taking chances on others. When you've got someone who has the passion, the desire, the attitude and the work ethic, this is really much more important for me than what they have on their CV, where they went to school or what they studied."
Painters' pointers for prudent planning
Shelly Painter shares five tips for successful investment
Identify goals "You need to decide what you are saving for and what your timeframe is, such as retirement in 30 years or a vacation next year."
Broaden your portfolio "Research shows thar over a 30-year period, diversification in, say, an equity portfolio will our-return any other more narrow portfolio."
Consider the costs "This is the one thing you can control: how much are you willing to pay in management fees and the like?"
Be steady "Don't get nervous when the market goes up and down and up - it always does. Jumping in and out will cost you transaction charges and commission."
Be wary "People in Asia in particular chase returns, but if it looks too good to be true, it probably is."