‘Help people increase their financial literacy.’ That was BlackRock CEO Larry Fink's advice to the Netherlands, now that our pension system is moving from defined benefit schemes to defined contribution schemes. Fink visited APG, where he talked to Ronald Wuijster, CEO of APG Asset Management.
In the 'Meaningful Conversation', Fink, co-founder of the largest asset manager in the world (assets under management 11.6 trillion dollars) shares lessons he learned as an entrepreneur. A better understanding of investment risks and the role of technology to achieve that played a crucial role in this. He also discusses the contribution of the various acquisitions by BlackRock to the development of the company since its inception
37 years ago.
Culture
Fink: “In every acquisition we ever did, in the first months of conversation price and valuation were never discussed. Those are pretty easy to determine. A much more important question was: is there a common view, is there a common understanding? The sum of the acquisitions should be one organization, with one culture and one technology platform."
About the various demands of the clients for whom BlackRock invests and the dilemmas they sometimes create, he says: "Our most important task on behalf of each and every client is to achieve financial returns. But if a client wants us not to invest in something, for example in defense or coal, we filter it out. If a client wants us to invest their capital entirely in decarbonization, we will do that."
Education
When asked if he has any advice regarding the Dutch pension system, Fink advises to learn from the American experiences with defined contribution schemes: " As we all know, in the Netherlands there's going to be a pension reform away from defined benefit to defined contribution. From my experience of managing a lot of defined contributions in the United States, when we shifted more risk to individual people, we didn’t do enough for financial literacy. We need to inform people and educate them on an individual level. With new technology we can provide much better financial education to help people navigate.”