Off the Cuffe: the next big challenge

For a predictable numbers man, Chris Cuffe sure is full of surprises.

At the end of a long and fruitful interview on the broad topic of Australia’s wealth management industry, the bloke whose name is forever etched in the annals of industry folklore drops a clanger.

Our discussion had not laboured the obvious: Cuffe’s much-publicised personal wealth, or “personal economics” in his own words. And the discussion had not strayed onto the topic of his recent step down from chief executive to operational manager in charge of funds management at Challenger Financial Services Group. Nor had we broached the sometimes sensitive subject of working with the Packer family.

But when asked about his future beyond the industry, the funds management chief with Challenger Financial Services Group gives a rare insight into his drive.

He has toyed with the idea of becoming a finance journalist, a financial analyst and even a financial planner. Or better yet, a corporate regulator.

This would come as intriguing news to Australian Securities and Investments Commission chief JeffreyLucy, who would be mad to turn away the substantial inside knowledge that an executive of Cuffe’s calibre — if it ever were offered — would almost certainly bring.

And the best thing for the budget conscious ASIC is that, now the issue of money is out of the way, Cuffe could probably be persuaded to do the job for nothing.

That Cuffe is prepared to even consider a job on the other side of the corporate ledger speaks volumes about his true motivation to make a difference in business and put back into an industry that has served him well.

It also reveals that Cuffe has eschewed the grandiose lifestyle of the rich and powerful and will pursue paths where he can make maximum impact for the good of investors and industry alike.

Those who have worked alongside Cuffe over the years understand this altruistic bent to be a fundamental passion of the man.

Those same people watched in horror the public dismantling of an unblemished professional track record because Cuffe had committed the Australian cardinal sin of becoming an overnight tall poppy.

The media seized upon their version of the Chris Cuffe story: the rags to riches rise of an ordinary bloke. It had a bitter twist. The savaging (which only the tabloid press and a federal treasurer could justify) sought to expose his private life while holding him personally accountable throughout a prevailing national mood of punishing corporate largesse.

All this because the astute Cuffe had negotiated a fair incentive deal conceived years before the Commonwealth Bank took ownership of one of the jewels in the funds management industry’s crown.

Wiser, Cuffe is today a reluctant interview subject.

The days following the publication of the terms and extent of his deferred bonus payments — in the six months prior to his departure, Cuffe received $29.5 million for performance during his tenure at Colonial and a final payment of about $1 million upon leaving — have left a bitter taste.

No recriminations, Cuffe is just selective about who he talks to, leading press reports to describe him as “media shy”.

Yet the media does not have a monopoly on the Cuffe story.

Others have their own adaptation of history.

Financial advisers, for example, remember that in a sea of funds management mediocrity, Cuffe built investor wealth by leading a culture that incubated the equity genius of the likes of Greg Perry, Barry Henderson and others.

Former colleagues and staff who rode the 1990s equity market boom and the rise and rise of the one time State Bank of NSW-owned First State funds management business add their piece of the Cuffe corporate pastiche.

They almost always begin with his professional qualification — ‘a bean counter’ — and how a head for numbers shaped his personal style as a detail-focused individual down to the last dotted ‘i’, the final crossed ‘t’.

Cuffe’s unrelenting, some say obsessive, drive to get the job done right is also legendary. A former marketer tells of the frustrations of Cuffe re-writing advertising copy because the ad hadn’t quite got the technical issues covered.

Control freak or perfectionist? Either way, Cuffe has made a significant difference and remains passionate about the business of wealth creation and asset management.

He points to the work being done at Challenger on new fronts — especially the debt end of the equation — as evidence there is much left to do.

Challenger bought residential property lending business, Interstar, in September 2003.

“Many people don’t know that Challenger is now the seventh largest [home loan] lender behind the big four banks, St George [Bank] and GE/Wizard,” Cuffe says.

“It’s a wholesale lender and…we’ve been introducing lending products through the financial planning community.”

Cuffe says the diversification into the lending business marks the trend by financial planners towards offering more holistic services where a wider product range is needed to support their activities.

And of diversification, Challenger’s decision to go upscale in the advice business with the acquisition of Associated Planners Financial Services (APFS) for $91.3 million, smacks of classic Cuffe: take a cottage industry, corporatise it while building scale and brand around it.

With a promise to deliver Australia’s pre-eminent brand in the financial planning space, the APFS buy was the first volley in what promises to be an interesting battle to seize the mass affluent space in financial planning.

“We absolutely believe in the value that the planner in front of the client creates. It’s very important, and we respect that. We understand the independence issues, but that the planner too is a part of the dealer group.

“And so we think the dealer group plays a very important role: who it employs, the brand, advertising — you hardly see any advertising from financial planners in Australia. And this is one thing highly in line with having an association with the Packer group… we think we can create a brand with the help of our resources here that is really a brand people can latch on to.”

With a new financial planning brand to be launched in the first quarter of 2005 out of the merged Garrisons and APFS businesses, the industry can look forward to the potential benefits of riding the coat-tails of a Cuffe-Packer mass marketing treatment of financial planning.

Is Cuffe optimistic about the future of the wealth management industry?

“I’m extremely optimistic, and it’s not just because I work in it. People tell me I have lots of choices in life, and yeah, I’ll say I have a choice about whether or not I want to work in this industry.

“But I’ve been happy to come back into this industry because I believe there is still further change to occur.”

Cuffe is a self-confessed team player, and admits enjoying the thrill of moving at a cracking pace.

So, is a job at the corporate regulator really on the cards?

“I like the industry. And one day I might be on the regulations side. I’ve often thought that if a strong driver is not your personal economics, then you should choose [a role] where you can influence things.

“I’ve actually thought about joining the police force, believe it or not, as a way to help stop corporate crime.”

Whether or not Cuffe pursues any of these roles remains to be seen. But the thought of one of the industry’s brightest turning his talents to nabbing white collar criminals is an appealing, if somewhat unexpected, notion.

Bruce Madden is a director of BlueChip Communication Group. Write to Bruce at [email protected]