Advisers need to be ready for geopolitical disruptions

Oksana Patron

30 October 2023

Financial advisers must be “increasingly nimble, agile and flexible” in the current geopolitical environment and prepared for ongoing disruption while looking for potential investment opportunities arising from structural change, Arthur Sinodinos, Partner and Chair of The Asia Group and former Liberal Minister and Assistant Treasurer said at the Hannemann and Brown Wealth Symposium via video link from Washington D.C.

Sinodinos, who also served as Australia’s Ambassador to the United States from February 2020 to March 2023, said disruption was ‘the new constant’ and advisers should be flexible in their responses to changing circumstances.

“We’re facing a conundrum around how long inflation will last and the latest talk is of a rate increase on Melbourne Cup day. In the US, inflation is high, the cost of living is going up, and rates are expected to be higher for longer than anticipated,” he noted.

He added that government intervention in industry policy, particularly in the US, was impacting and influencing businesses, citing the global clean energy transition and the Biden Administration’s CHIPS and Science Act, has underpinned significant investment in US semiconductor manufacturing, research and development.

But, according to Sinodinos, structural changes would underpin growth in some sectors for decades to come, create opportunities for private companies and investors.

“Private companies are picking up on these trends and seeing an opportunity to invest in key areas, some in partnership with governments,” he said, citing the Australian government’s Redspice project, and the partnership with Microsoft to boost the cyber capabilities of the Australian Signals Directorate, which is responsible for signals intelligence, support to military operations, and information security.

“All this means that some sectors will be strong for some time.”