Insights

Meet Dan and Stan: IOOF's new investment duo

Thursday 6th July 2017 Kate Neilson

Dan and Stan

This week Dan Farmer and Stanley Yeo took over the reins at IOOF, as chief investment officer and deputy chief investment officer, following the retirement of Steve Merlicek. They speak with Industry Moves about the greatest lessons learnt from their former boss – a good dose of humour never goes astray – and their plans for the next 12 months. We also discovered Dan's favourite lunch spot and how Stanley found out the hard way that “failure is the mother of success”.





Getting to know Dan and Stan

What initially attracted you to the finance industry?

Dan: Sadly, I can’t say there was an epiphany moment. I entered university with the sole objective of landing a steady job at the end. Originally I enrolled in the relatively safe employment option of an accounting degree. After taking a few finance subjects I saw the light and switched to economics and finance. Discovering early on how big a role human behaviours, such as fear and greed, play in driving markets and the intuition required to assess market conditions was fascinating to me and a genuine contrast to other career options. While I was completing my Masters I managed to get a job at TelstraSuper where, on my first day, I was sitting in front of an IRESS screen helping to manage an Australian equity portfolio. From that point on I was certain that the finance industry was the way to go for me.

Stanley: Working in the finance industry has always been my second choice. See my response to the last question as to my first choice! Nevertheless, I have always had a keen interest in investing and working in a fast paced environment. Compared to other industries, the investment industry tends to place less weight on seniority in judging the readiness of employees for advancement. High performers can easily move ahead with less emphasis on age, making this industry particularly attractive for ambitious young people. It also can’t be ignored that the investment industry is noted for compensation structures that are overall, much more generous than in other sectors of the economy.

What are your plans within your new role over the next 12 months?

Dan: We have a great performance focused culture within the team, re-enforcing and building on that culture is key a priority for me over the first year. Milestones in the first year will be introducing our new Portfolio Manager for Australian Equities into the team culture and investment process as well as our new asset Consultant Mercer. Demonstrating value add to our clients through continuing strong performance, quality and breadth of the investment team, and consistent strategy are also important to consolidate this year.

Stanley: To maintain the great culture that Steve Merlicek has created and to continuously improve on performance by discovering and partnering with innovative investment managers.

What are you most looking forward to about working alongside Stanley/Dan?

Dan: Stan and I have achieved some great outcomes working together over the last few years under Steve’s guidance, I’m looking forward to both of us, along with rest of the team, demonstrating the great talent we have here. On a more personal level Stan is a great person to work with, smart and insightful but also good for a laugh and easy going. I’m particularly looking forward to Stan’s housewarming at the end of his major home renovation due to finish this year.

Stanley: I’ve worked with Dan at IOOF for over 7 years so we know each other well. We have a strong team that is vibrant and easy going and I genuinely enjoy working with a bunch of smart people in our team in what is a very high achieving yet fun environment.

What’s the greatest lesson that you’ll take from outgoing CIO, Steve Merlicek?

Dan: Having worked with Steve for 20+ years its tough to pick just one lesson. Moving into my new, role one of Steve’s many catch phrases does stand out: “It’s the performance stupid” parading Bill Clintons ’92 election slogan. Steve is a master of not getting caught up in all the distractions that can come along with being CIO and keeping a “laser beam” focus on what really matters - performance. Of course not taking yourself too seriously and enjoying a good lunch are also right up there.

Stanley: The greatest lesson that I’ve learnt from Steve is how to insert humour, no matter how awkward, to any situation. Always have perspective, and don’t take things too seriously. Steve is a big personality that will be greatly missed by our team. The other lesson I’ve learnt is to stay fit and healthy!

Dan, will there be any significant changes to IOOF’s investment process as you take the lead?

Dan: We have a robust investment process in place which Stan and I have developed with Steve over the past several years, and I don’t see a need for major change or overhaul. Ongoing enhancements are always healthy and we will be working to deepen our risk analysis systems and further integrate these into our decision making process.

Dan, what prompted the introduction of a deputy CIO role?

Dan: Most professional teams I have worked in or observed tend to have deputy leader in practice but this is not always reflected in their title, I wanted to formalise this role in my team. We retain flat and open management structure, but I see the Deputy CIO title providing additional gravitas to play an important role in mentoring new and junior members of the team and being a role model in perpetuating behaviours and team culture. I saw Stan was an ideal candidate for the role, given his ability and respect from the team.

What has been your most memorable investment and why?

Dan: My most memorable investment is memorable because it was my first, a minimum $500 allocation of Woolworths shares in the IPO, it seemed like a big investment at the time, unfortunately I sold out way too early.

Stanley: From a personal perspective, my first home in Fitzroy North has been my most memorable and best investment. I still live there 14 years on and it has provided me with great experiences and the opportunity to expand my investment portfolio.

Stanley, what has been your proudest achievement following over 17 years in the industry?

Stanley: My proudest achievement has been my smooth transition from PM Cash and Fixed Interest to PM International Equities when the opportunity arose. I was able to leave the Cash and Fixed Interest portfolios performing very strongly and eventually improve the performance of the international equities portfolio from fourth quartile to first quartile.

Stanley, how do you think your previous role as Portfolio Manager - Strategy & International Equities will aid you in this new position?

Stanley: In my role as Deputy Chief Investment Officer, I still manage the international equities portfolio and the diversified funds. My previous roles as PM Cash and Fixed Interest and PM Strategy & International Equities has provided me with a more holistic approach to investing to assist Dan in making the difficult decisions and leading the team to continued success.

Who has had the biggest influence on your life/career so far?

Dan: Over my life it has to be my Mum. I was the first person on either side of my family tree to go to university, so study post VCE was a little foreign to the family, but mum supported me and gave me a great environment to slog through my studies and get me to where I am. Over my Career my first real boss, John Simkiss, is up there with Steve. John is a true gentleman of the market and took me under his wing and taught me the ropes of the market.

Stanley: My father has been the biggest influence on my life. Everything I’ve achieved so far I put down to his influence. Education was a big focus for our family – moving out to Australia at a very early age in search of better education which has given me the opportunity to succeed.

What was your very first job?

Dan: Over a couple of school holidays I worked in a small sheet metal factory that turned out commercial air conditioning ducts, a key part of the “role” was crawling inside the ducts stacked up out in the yard and grinding off any sheet metal protruding. OH&S was different back then.

Stanley: I was working in Accounts Payable at the RACV during the holidays when I was at university. It was basically a data entry role. My keystrokes per hour was very fast so there was always work for me during the holidays to clear the backlog of invoices.

What’s the best piece of advice that you have received?

Dan: My Grandfather told me towards the end of his life to always take your chances when they come, and that the greatest regrets are always the chances not taken.

Stanley: My father always taught me not everything in life is going to go according to plan and that failure is just part of the plan. I was taught that I shouldn’t worry about failure itself but about what happens after you fail. A setback is never a bad experience, just another one of life’s lesson. He was Chinese educated and would point to the Chinese proverb ‘Failure is the mother of success’.

What’s something most people wouldn’t know about you?

Dan: Having worked with Steve for a many years I can safely say the most common thing sales people wanted to know about him but clearly didn’t know was “What’s his favourite lunch spot”. In that light, I can reveal I have very simple tastes and a pizza at Lupinos or a great steak are my favourites.

Stanley: In primary school I was obsessed with magic and wanted to become a magician. I once performed a magic show in front of the whole school and wanting to impress, I stepped up the level of difficulty of the tricks. I performed a series of tricks, and every single one of them failed! Thinking that my grand finale would save me, I rolled up a piece of newspaper into a cone and poured a glass of water into it. The water was supposed to disappear when I unrolled the cone, but I poured the water in the wrong place and it just came out the other end! I never recovered from that performance… maybe one day I will apply my father’s advice about failure to that situation and aspire to become a magician again!

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