Lelde Smits - The Capital Network
Lelde Smits is a Director of The Australian Shareholders’ Association, co-founder of The Capital Network, and has been ranked as one Australia's Top 100 Entrepreneurs. She has reported breaking news from thousands of listed companies and interviewed hundreds of executives and investors around the world.
Her companyrecently organised MarketLit, Australia’s First Financial Influencers, Millennial and Gen Z Investment Conference. MarketLit brought together leading financial influencers, market experts and ASX-listed companies to discuss the key investment themes and ESG (Environmental, Social and Governance) issues that emerging investors care about. Here's the link to watch:
"Almost 45 million US households will transfer a total of 68 trillion US dollars in wealth in the next 25 years. And millennials are really going to be the primary beneficiary of these transfer. So by 2050, they're expected to replace the baby boomers as the generation with the greatest wealth and online share trading platform. NABtrade says in Australia, millennials will inherit around three and a half trillion dollars from baby boomers over the next 20 years. And then of course, when we look at millennials coming into investment, it's also important to understand, well, what is important to millennials and Morgan Stanley says that 86% of millennials are interested in sustainable investing and twice as likely as the overall population to invest in companies targeting ESG goals." – Lelde Smits
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Lelde Smits (3s):
NABtrade says in Australia, millennials will inherit around three and a half trillion dollars from baby boomers over the next 20 years. And then of course, when we look atmillennials coming into investment, it's also important to understand what isimportant to millennials. And Morgan Stanley says that 86% of millennials areinterested in sustainable investing and twice as likely as the overallpopulation to invest in companies targeting ESG goals.
Phil Muscatello (34s):
G'day. and welcome back to Shares for Beginners, I'm Phil Muscatello. The world is approaching thelargest transfer of intergenerational wealth in history. By 2050 people who are now under 40 will be managing this accumulated wealth. Joining me today is Lelde Smits from the Capital Network Media and Investor Relations Agency. Lelde, you're a director of the Australian Shareholders' Association and co-founder ofThe Capital Network. You've been ranked as one of Australia's top 100entrepreneurs, and you've reported breaking news from thousands of listedcompanies and interviewed hundreds of executives and investors from around theworld. Is there anything else that you haven't done I've actually left stuffout of your CV because there's just too much there.
Lelde Smits (1m 19s):
A lot to do, but a lot still more that I want to do as well.
Phil Muscatello (1m24s):
That's great. So tell us about the path that originally led you to finance journalism.
Lelde Smits (1m 28s):
Oh, well it was a completely unexpected path. I can say that at heart, I'm a very idealistic person and really believe in truth and equality and wanted to do something with my life that aligned with those values. So I did my undergraduate studies at Adelaide uni, studying media and anthropology, moved to Sydney to do mymaster's in journalism and was a very poor student when I was looking at jobads one day on seek and saw an ad for a broadcast finance journalist. And Ialways remember that moment because at that moment I was actually neither ofthose things, certainly not with the experience that I asked for, but I wasexceptionally passionate about journalism.
Lelde Smits (2m 12s):
I applied. I told my future boss all of the reasons that I would love to work for him and would loveto be a broadcast finance journalist, and he bought it. And that started a journey for me that was completely fueled by passion as I think many journalists are to then go on and work, not only in Australia, but inside the New York stock exchange and NASDAQ as a foreign correspondent.
Phil Muscatello (2m37s):
One minute where you'regetting a job here in Sydney, where was that job?
Lelde Smits (2m 40s):
That job was at Finance News Network,. So an online provider of finance news, they were one of the original providers of online finance news. And I remember my boss telling me that when he started people were using dial-up internet. So they couldn't really even access a lot of the finance videos. And now of course, we take thisfor granted, but he was very innovative. And I think the company was aiming toconnect people, to finance news in a way that hadn't been done before. And itreally gave me the platform to go to where I have now.
Phil Muscatello (3m16s):
Yeah. Yeah. And thenwhat took you to wall street?
Lelde Smits (3m 20s):
I was every day reporting of course, on waking up at 5:00 AM. I used to wake up and at 6:00 AM, I would get to work and look at what Wall Street had done overnight. And according to wall street leads, the Australian share market is poised to open higher or lower or a flat start. And I would just think about Wall Streetobviously every day, because I was writing about it every day. Wondering, whatis this place? What happens there, to me it was almost like the moon, thismagical place that I'd never visited, but speak about every day. So it becamean obsession to get there. And
Phil Muscatello (3m59s):
It was kind of like the Xanadu of finance for you. Was it?
Lelde Smits (4m 3s):
Absolutely. It was like this mission I had to get to these places that I speak of but don't know of really. And I, of course applied for leave. I booked a holiday to the US and I only had 48 hours in New York because my holidays were very short as well. And just before I left, I told my boss it's my dream to go to Wall Street and Ijust want to stand there. And he said to me, literally, the day before I left,while you're there, you should get in touch with a guy I know, he owns a mediafirm inside the New York stock exchange and long story short, I met that manand given a few other people that I met a few years later, I was working insidethe New York stock exchange as a result of that initial introduction.
Phil Muscatello (4m52s):
So what era was that? What was the market cycle at the time?
Lelder Smits (4m 56s):
Oh, yes, that's a good question. I also remember political era because I was working on Wall Street in 2015, which is when Trump announced that he was going to run for president and no one believed him. So I remember clearly walking to work and walking in the news agencies that were having the local paper given out and every day saying,who is this person who thinks that he will be president?
Phil Muscatello (5m27s):
And the Trump tower was very close to Wall Street. Isn't it?
Lelde Smits (5m 30s):
Yeah, there's a lot of Trump around New York in general. And in fact, when I was there, I even asked him for an interview and I got as close to him as his media advisor Hope Hicks at the time who politely declined in a very, very lovely way and said, Mr. Trump is very busy at the moment, but it was a great and interesting timeto be there. And of course, an incredible life and professional experience,
Phil Muscatello (5m58s):
Oh, I'd like to give listeners insight into how the world of markets work and a big part of markets is investor relations and your company works with investor relations. What isinvestor relations
Lelde Smits (6m 11s):
So if I was to ask you, where do you see Coca-Cola's public relations, you would be able to give me a million examples. You would see Coca Cola on billboards, in magazines, on radioads, television ads, Superbowl ads, Coca-Cola's brand placement from the publicrelations department is very strong because they are asking their consumers tobuy drinks. Whereas Coca-Cola's investor relations would have completelydifferent strategies using perhaps even the marketing that Coca-Cola generates,but really repurposing that to an investor audience, to inform them of theinvestment behind Coca Cola, to sell the stock as opposed to selling the drink. en give the example of Coca-Cola.
Lelde Smits (6m 54s):
So if I was to ask you, where do you see Coca-Cola's public relations, you would be able to give me a million examples. You would see Coca Cola on billboards, in magazines, on radio ads, television ads, Superbowl ads, Coca-Cola's brand placement from the publicrelations department is very strong because they are asking their consumers tobuy drinks. Whereas Coca-Cola's investor relations would have completelydifferent strategies using perhaps even the marketing that Coca-Cola generates,but really repurposing that to an investor audience, to inform them of theinvestment behind Coca Cola, to sell the stock as opposed to selling the drink.
Phil Muscatello (7m40s):
And a lot of it's a legal requirement, isn't it? In Australia, ACIC requires companies to really keep investors informed about anything that will be affecting the price of that particular share.
Lelde Smits (7m 52s):
Absolutely. So in Australia, certainly in America as well, companies have very strict legal requirements how they have to communicate. And so part of the investorrelations department or professional is to ensure that all compliance and regulation is matched and that a company can maintain all of its in Australia.We say continuous disclosure obligations informing the market while also simplycommunicating who they are as well. So unlike a lawyer who may advise a companyjust to release legal information and investor relations professional may say,well, let's look at this legal information and let's talk about how we canexplain this simply so that more investors can understand the information in amore simple way.
Phil Muscatello (8m44s):
And it's a big part of a role for a CEO to be selling the story of the company as well. And this is going to be a very different role from an ASX200 big listed company, too, something at the very small end of the market as well, and selling this storyor telling the story is an important role for CEO's to undertake. Isn't it?
Lelde Smits (9m 7s):
Absolutely whoever you are and whatever you do, the way that you communicate, what you do is vital.And the difference you spoke about between large and small companies is alsoone to note because it changes a lot with investor relations, how they may deal with that.
Phil Muscatello (9m23s):
It's a completel ydifferent dynamic isn't it?
Lelde Smits (9m 26s):
Yes, for example ,Investor relations for a top 200 company will probably be a full-time job more than 40 hours per week. They may even know the company so intimately that they may have the responsibility of speaking about that company publicly as well. Whereas the company that I co founded The Capital Network is more of anoutsourced investor relations function for companies that are emerging. So theymay not have the requirement, the need, or even the budget for a full-timeinvestor relations provider. However, they still do require an ongoing serviceand access to skills.
Lelde Smits (10m 6s):
And often these emerging companies may be in their own growth phase. So they're investing in looking forthe next gold mine or researching the next cure for cancer and thereforeinvesting heavily into operations and requiring support at varying levels.
Phil Muscatello (10m24s):
And they want to tell their story as well, because if they've got a good story to tell, and ifthey've got a good business, investors need to know about it, don't they?
Lelde Smits (10m 31s):
Absolutely. And those examples, they explained just outlined with mining and science, two industries that really struggled to share their story simply they're very well understood by people in the industry. And perhaps if you have a medical degree or perhapsif you're a geologist, you'll understand the complexities of those regulatoryannouncements, but if you are not trained in those backgrounds, you do need anintermediary to come in and give you suggestions of how you can make yourinformation more accessible to investors and inform them while still being legallycompliant.
Phil Muscatello (11m10s):
Let's talk about the coming intergenerational wealth transfer. What are the numbers and how did thi sinspire you in terms of the conference that you just put on, which we'll be talking about in a few minutes,
Lelde Smits (11m 20s):
There are some hugenumbers. And I, I sort of felt this was coming because I'd read a few titles innew stories. And the ASX of course, released a study last year saying thatthere is a record amount of women and emerging investors. But when I lookedinto it, I was really shocked at the significance of our emerging investors and thought to myself, we need to do something that is The Capital Network, and we need to provide a platform to acknowledge this change and also to celebrate it, and also be inclusive of emerging investors who I think often feel left out of the story.
Lelde Smits (12m 1s):
So really just a few facts, almost 45 million US households will transfer a total of 68 trillion USdollars in wealth in the next 25 years. And millennials are really going to be the primary beneficiary of these transfer. So by 2050, they're expected toreplace the baby boomers as the generation with the greatest wealth and onlineshare trading platform, NABtrade says in Australia, millennials will inheritaround three and a half trillion dollars from baby boomers over the next 20years. And then of course, when we look at millennials coming into investment,it's also important to understand, well, what is important to millennials andMorgan Stanley says that 86% of millennials are interested in sustainableinvesting and twice as likely as the overall population to invest in companiestargeting ESG goals.
Lelde Smits (12m 56s):
And so when I read that fact, it just became almost a necessity that every company that was presentingin this conference addressed ESG, because I thought we can't have a conference that is talking to millennials and gen Z without talking about what is clearlyimportant to them in their investment goals and priorities. And so we said toevery listed company, if you want to present, you are required to include afocus on the environment, society and governments being of course, ESG.
Phil Muscatello (13m30s):
Okay. Let's have a look a bit deeper into the, this event. It was called Market Lit. That's the name of the event? That's right. Okay. And tell us how it went, how you put it together and who were the presenters and what was the response like?
Lelde Smits (13m 44s):
An incredible response, right? From the beginning, I was amazed to that. Most people got it straightaway after the numbers that I just read out to you, people said, yes, I get it. I want to be a part of it. I was absolutely thrilled that ASIC Australian Securities and Investments Commission, the Australian government's corporateregulator, secured their speaking spot. ASX came on board a range of people fromdifferent backgrounds. And when I say that different genders, differentinvestment backgrounds, different time spent investing as well. So we reallyset out to create an event that focused on diversity inclusion and speaking toan educating millennial and gen Z investors.
Lelde Smits (14m 29s):
Also, of course, with that focus on ESG. And we also had four ESG presenters and people from varying backgrounds. So that livestreamed on Friday, the 2nd of July and the livestream is available on TCN's, YouTube channel so far has attracted almost 15,000 views and a healthy 250 likes. So we were delighted with that response.We had national press coverage multiple times over again, highlighting the factthis was Australia's first millennial and gen Z investment conference. And Ithink if anyone was in doubt that millennials and gen Z investors areimportant, they should not be after this conference ran.
Phil Muscatello (15m17s):
It's interesting. I was chatting with someone from one of the ETF providers last week, and she said that investing has become pop culture. It's a fantastic way of looking at it. Isn't it, there is so much on all of the social media channels about investing now that it is a part of pop culture.
Lelde Smits (15m 36s):
That's very true. And suddenly people that are referred to as financial influences or otherwise financial content creators, I think are contributing to this pop culture andthe popularity of investing. And also of course, the ease in which people can enter into investing, as opposed to historically speaking, there are many morebarriers to entry, but I must say as well that also flag some concerns. And wewere really grateful once again, for ASIC participating in the conference whoflagged the concerns and issues that emerging investors also have to be awareof.
Phil Muscatello (16m15s):
And what are they?
Lelde Smits (16m 17s):
So I think specifically one of the most important factors younger investors need to be aware of is the risk of investing in the importance of knowing the rules that, and of course, following the rules. So this is a key reason why we did ask ASIC to present andsomething, they also noted in their presentation with more and more peopleusing social media to communicate about everything from their favorite foods tostocks. It's very important to know the difference between licensed andunlicensed financial information. So even on our livestream events, the titlewas market lit investment conference slash not financial advice. This issomething we wanted to be very, very clear about and, you know, we've all heardthe disclaimers, but they are really important to absorb and understand thesignificance of.
Lelde Smits (17m 6s):
So when you hear things like advice by contributors is general in nature, and doesn't take into account your objectives, financial situation, or needs. This is important to understand that there is a real difference between unlicensed and licensed financial advice. And, and that is really what the corporate regulator is there to, towarn and protect us from. And we also as much as wanting to speak to millennialand gen Z investors, wanted to have a platform that highlights the importanceof being aware of the risks as well.
Phil Muscatello (17m38s):
I think part of what's happening these days, and I say this with the podcast and I know that people will sort of come to the podcast because they think, oh, okay, I've heard you can make lots and lots of money in the share market. And we'll just get sometips and I will go ahead and I'll start making lots of money, but it doesn't work that way. Investing is not like that.
Lelde Smits (17m 58s):
I think anyone would tell you whether they are professional or not professional investors, that there are as many losses if not more than wins, but I think in any case, and it really goes for anything that you do in your life, you should conduct your ownresearch and try not to buy the hype because the hype is just that. And as youmentioned earlier, popular culture has glamorized this. And I think it alwaysto an extent has done so with investment, be it the Wolf of Wall Street, I'msure I was impacted myself by that glamorization, but the reality is quitedifferent. And I think if you research, then you protect yourself really fromthe hype and move more so into a position of reality.
Phil Muscatello (18m43s):
And the reality is you've got to understand that it's a longterm compounding thing. You're not going to be making overnight gains. You've just got to be putting your money away and just letting the market do its job.
Lelde Smits (18m 54s):
That's exactly right.
Phil Muscatello (18m55s):
Yeah. Have you got some highlights from the conference?
Lelde Smits (18m 58s):
Wow highlights, you know, I suppose for me the biggest thing was just that this was an Australia first event. That's something that made me very, very nervous beforehand, butalso makes me feel very proud to have the conviction, to see the trend. And then to back myself into saying, we are going to host this. So the highlightfor me was really doing it for the first time and getting the positive responsethat we did, because it really just showed me that this is a vital section andan emerging section of the market that we have to understand and also beinclusive of. And I use that word a lot because I think in the past, there areso many groups that have not been able to access investment or have not feltincluded in investment.
Lelde Smits (19m 46s):
Even myself. I come from a family where my dad controlled all of the money and not in a mean or nasty way. My mum was very happy for him to control it. But when he became sick recently, she had a huge amount of fear that all of her investments, all of her superannuation, all of her financial information and passwords even, were inhis control. So I think it's an important message for everyone to hear, toempower the community and individuals, women, and men to really take control oftheir finances.
Phil Muscatello (20m22s):
Yep. And really to understand what's going on. I think in the past financial marketing has always been about, you know, glossy brochures with happy retirees on the cover and the world of marketing finances being completely turned on its head at the moment .And this is part of what's going on, isn't it?
Lelde Smits (20m 40s):
Yeah, absolutely. And now we have never had so many ways in which to communicate and market and I think the entire marketing advertising communications industry is in a state ofsuch rapid evolution
Phil Muscatello (20m56s):
With so many startups as well. And FinTech startups, making so many more opportunities for investing available.
Lelde Smits (21m 2s):
Absolutely. And everyone is just clamoring to catch up. So I suppose from my background, working withthe ASX listed companies, we always just stress the importance of regulation and compliance. And it sounds very boring, but not only is it requisite, I think it gives you a really strong platform to once you're abiding by the rulesto then go out and be creative with the information that has been approved byyour legal team and to distribute it in ways that you may not have distributedit before that there are opportunities for listed companies to communicate morethan ever, and also for investors to access new investments.
Lelde Smits (21m 42s):
And I think as long as everyone's playing by the regulatory roles, it's exciting to be part of an industry that is undergoing so much evolution at the moment.
Phil Muscatello (21m52s):
I've never done an episode where I wouldn't have to do a disclaimer at the end, you've done it all for me.
Lelde Smits (21m 58s):
That's right, all throughout the podcast.
Phil Muscatello (22m0s):
So not everyone will be benefiting from this wealth transfer. Some families are just not that well off. How can you start with nothing?
Lelde Smits (22m 7s):
That is a very good question and it can be very overwhelming to consider what this wealth transfe means. And I very much think of the people impacted by COVID as well.
Phil Muscatello (22m17s):
Really. It's been the ,the less well off. It's not been. The welfare recipients has been like the working poor people who are in jobs that don't pay a lot of money. And they're the ones that have been most effected by these lockdowns, let alone what's going on in Africa at the moment, but that's a whole other story.
Lelde Smits (22m 34s):
Yeah, absolutely. Ithink of that a lot. And there is so much excitement put on how the stockmarket has performed with record amounts of stimulus in the past year. But that also has had a flip side, negative impact on the people that still have to shut their businesses because they can't operate. So I do think about that a lot.And I suppose in response, how you can start with nothing with that I wouldlike to quote the Australian shareholders association CEO, John cowling, whospoke with me at the MarketLit, millennial and gen Z investment conference.And John really spoke about the importance of having an investment strategy andgetting started today. So I should mention as well, he is a very experiencedman who has spent decades working in finance and investing.
Lelde Smits (23m 21s):
And he also spoke abou thow ASA supports millennial and gen Z investors through membership and education, but he's real nugget of wisdom. And what he loves to say always is that the way to build wealth is through property or shares. And as property is out of the reach for most young people, he really says that you need to fallback on the alternative, which is the share market. So his plan and strategy isto save $20 per week. And after 25 weeks, he says, you will have $500, which isthe minimum parcel to invest. And then he says, if you do this every sixmonths, save $20. Then when you get to $500, you invest it.
Lelde Smits (24m 2s):
He says, when you get to his age, you will have a million dollar share portfolio. So in his experience, in his view, you can really start with as little as $20 and really breaking itup into those segments that I just outlined and still end up with wealth. If you take the long-term view.
Phil Muscatello (24m24s):
And of course these days, you don't even need to do individual shares. You can look at ETFs as well to provide you the broad based exposure.
Lelde Smits (24m 32s):
That's right. There are so many options. And I think if you do your research and you find the platforms that work for you, the approaches that work for you and the risk that you're prepared to take on because different people absolutely have different risk appetites or capacities. But I think a lot of people can visualize a $20 note, even though we don't even use cash very much. We still know how it looks like. And it's a small number to keep in mind that can have an accumulative compounding positive effect.
Phil Muscatello (25m7s):
Yeah. And if he can't start with 20, start with five, just even $5 a week, just getting something away. And of course there's a plethora of new services that allow you to start with very little money and investing as well these days.
Lelde Smits (25m 21s):
Phil Muscatello (25m21s):
Lelder, thank you verymuch for joining me today.
Lelde Smits (25m 23s):
Thank you very much,it's been a pleasure.
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