Franklin Templeton Investments

A Message from Lord Pickles and Lord Blunkett, followed by Franklin Templeton Investments's best practice article

The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from Franklin Templeton Investments is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.

Blunkett signature Rt Hon The Lord David Blunkett
Pickles signature Rt Hon The Lord Eric Pickles

www.franklintempleton.co.uk

THE PARLIAMENTARY REVIEW
Highlighting best practice
18 | FRANKLIN TEMPLETON INVESTMENTS
Martyn Gilbey, UK country
head
By drawing on its heritage of good corporate citizenship, Franklin
Templeton Investments, a global asset manager with UK offices
in London, Leeds and Edinburgh, is rising to the challenge of
technological disruption and evolving investor expectations. They
seek to deliver outcomes that help their clients to secure their
financial future – UK country head Martyn Gilbey elaborates.
The state of the union
The UK is a world leader in asset management – it is the industry’s largest centre
in Europe, and, globally, second only to the USA. According to the Investment
Association, asset managers employ 93,500 people in this country, and are critical
to the success of the wider economy: they provide 60 per cent of capital market
financing for British businesses, and buy 65 per cent of new bonds.
The industry, however, is going through a period of significant change. New
technology is transforming both client expectations and the way asset managers
inform their decisions. Regulatory change has altered business models and opened
a financial “advice gap”. There is also a growing interest in the governance of
investments alongside their social and environmental impact.
Change from outside is impacting the industry too. Shifting demographics make
building a secure financial future more important than ever, yet young people are
saving less than previous generations. In the political arena, there is still uncertainty
surrounding the final Brexit deal.
These forces are spurring the asset management industry to innovate to attract
and retain investors. We have responded to the considerable challenges facing our
industry by drawing on our corporate values and putting clients’ interests at the heart
of all decision-making.
Protecting our clients
In practice, this means three things: we are integrating environmental, social and
governance (ESG) considerations within the investment process and in our actions as
a company, we are embracing new technologies and we are maintaining investment
excellence.
Take ESG first: our firm was founded in 1947 by Rupert H. Johnson Sr,
who named the company after Benjamin Franklin. To many Americans, this founding
father epitomises frugality and prudence. Franklin is also credited with popularising
the saying “Do well by doing good”.
In this spirit of civic engagement and citizenship, we believe that being a good
corporate citizen is good business. Strong economies and societies around the world
help to fuel the growth of our business, while integrity, trust and responsibility are
essential to our continued success. How we operate as a firm, how we treat our
people and how we behave in our communities not only affects our business, but
also impacts our reputation with investors, customers and employees.
Clients are increasingly looking for asset managers who can demonstrate how
ESG is embedded in their investment philosophy. By integrating these factors into
investment analysis along with traditional financial measures, we have been able to
AT A GLANCE
FRANKLIN TEMPLETON
INVESTMENTS
»Chairman and CEO:
GregJohnson
»UK country head:
MartynGilbey
»Established in 1947
»Based in London, Edinburgh
and Leeds
»Services: Asset management
»No. of employees: Over 9,200
worldwide
»Offer over 150 investment
strategies worldwide – from
traditional to alternative
investments
Franklin Templeton
Investments
19FRANKLIN TEMPLETON INVESTMENTS |
BEST PRACTICE REPRESENTATIVE 2018
reach a fully representative view about
the organisations in which we invest.
This approach allows us to evaluate
the potential risks to an organisation’s
value caused by ESG issues – the cost
of cleaning up pollution, for example,
or reputational damage – as well as
the rewards for long-term valuations.
We believe that ESG can be a driver of
long-term investment performance by
helping to identify new opportunities
while mitigating risk.
We employ a dedicated team of
ESG specialists; they act as a central
resource for investment teams to
provide insight and guidance on ESG
while also contributing to industry
and regulatory debate. We are also a
member of or signatory to a number
of industry initiatives, including the
Principles for Responsible Investment,
the UK Sustainable Investment and
Finance Association (UKSIF) and the UK
Stewardship Code.
Innovation and technology
Our second focus, technology, prioritises
improving the service we give our clients,
optimising information management
and making our operations more
efficient. There are three ways in which
we are using financial technology to
improve returns for our investors and
our business. These are:
1. Building our skills in investment
management data science to gain
an information advantage for our
investment teams.
To accomplish this, we are building a
data science and artificial intelligence
centre in India, and have embedded
data scientists in each investment team.
Our data scientists have access to a
centralised “hub” of pooled resources
in data analytics, and use a common set
of applications and tools for analysis.
This ensures consistency as well as open
access to a backlog of demonstrable
best practice and quality ideas.
2. Using our strategic investment pool
to invest in technology innovators
that can be complementary or even
disruptive to our business.
By taking a front-row seat and
partnering with these companies, we
can be at the forefront of developing
the technology that impacts the
traditional asset management model.
3. Building and testing our own
technologies expediently through a
rapid development process.
For our own innovations, we move
rapidly from concept to design to a
prototype phase, just as a start-up
would do. If it doesn’t work, we discard
it and move on to the next idea. We
work at the same pace as the fintech
companies that are disrupting or
otherwise affecting our business.
Investment excellence
Our third overarching commitment is to
investment excellence. Our dedication
to rigorous research and disciplined
risk management helps us to identify
organisations with attractive valuations
and good long-term growth prospects.
Decade after decade, our consistent,
research-driven processes have helped
us to earn strong, long-term results for
clients and shareholders.
In this period of significant change for the
industry, our clients, be they individuals
or large pension funds, increasingly
demand services and products that are
tailored to their goals and values. They
also want the technology that places
investment decisions at their fingertips.
We believe that our commitment to
ESG, to technological innovation and to
investment excellence will allow Franklin
Templeton to deliver outcomes that fit
our clients’ goals rather than tracking
market benchmarks.
Staying stalwart
For more than 70 years, our firm has
been navigating the world’s financial
markets and building a globally diversified
business. Asset management is changing,
but our unchanging corporate values of
putting clients first, building relationships,
achieving quality results and working
with integrity will continue to drive how
we work and do business.
Franklin Templeton
employees volunteering
in the community
Edinburgh employees
supporting Alzheimer
Scotland’s Dementia
Challenge
How we
behave in our
communities
not only affects
our business,
but also
impacts our
reputation with
investors,
customers and
employees

www.franklintempleton.co.uk

This article was sponsored by Franklin Templeton Investments. The Parliamentary Review is wholly funded by the representatives who write for it. The publication in which this article originally appeared contained the following foreword from The Rt Hon Theresa May MP.

The Rt Hon Theresa May MP's Foreword For The Parliamentary Review

By The Rt Hon Theresa May MP

This foreword from the then Prime Minister appeared in the 2018/19 Parliamentary Review.

British politics provides ample material for analysis in the pages of The Parliamentary Review. For Her Majesty’s Government, our task in the year ahead is clear: to achieve the best Brexit deal for Britain and to carry on our work to build a more prosperous and united country – one that truly works for everyone. 

The right Brexit deal will not be sufficient on its own to secure a more prosperous future for Britain. We also need to ensure that our economy is ready for what tomorrow will bring. Our Modern Industrial Strategy is our plan to do that. It means Government stepping up to secure the foundations of our productivity: providing an education system that delivers the skills our economy needs, improving school standards and transforming technical education; delivering infrastructure for growth; ensuring people have the homes they need in the places they want to live. It is all about taking action for the long-term that will pay dividends in the future.

But it also goes beyond that. Government, the private sector and academia working together as strategic partners achieve far more than we could separately. That is why we have set an ambitious goal of lifting UK public and private research and development investment to 2.4 per cent of GDP by 2027. It is why we are developing four Grand Challenges, the big drivers of social and economic change in the world today: harnessing artificial intelligence and the data revolution; leading in changes to the future of mobility; meeting the challenges of our ageing society; and driving ahead the revolution in clean growth. By focusing our efforts on making the most of these areas of enormous potential, we can develop new exports, grow new industries and create more good jobs in every part of our country.

Years of hard work and sacrifice from the British people have got our deficit down by over three quarters. We are building on this success by taking a balanced approach to public spending. We are continuing to deal with our debts, so that our economy can remain strong and we can protect people’s jobs, and at the same time we are investing in vital public services, like our NHS. We have set out plans to increase NHS funding annually by an average by 3.4 percent in real terms: that is £394 million a week more. In return, the NHS will produce a ten-year plan, led by doctors and nurses, to eliminate waste and improve patient care.

I believe that Britain can look to the future with confidence. We are leaving the EU and setting a new course for prosperity as a global trading nation. We have a Modern Industrial Strategy that is strengthening the foundations of our economy and helping us to seize the opportunities of the future. We are investing in the public services we all rely on and helping them to grow and improve. Building on our country’s great strengths – our world-class universities and researchers, our excellent services sector, our cutting edge manufacturers, our vibrant creative industries, our dedicated public servants – we can look towards a new decade that is ripe with possibility. The government I lead is doing all it can to make that brighter future a reality for everyone in our country. 

British politics provides ample material for analysis in the pages of The Parliamentary Review 
The Rt Hon Theresa May MP
Prime Minister