Investing assets begins with listening. Martijn de Vree, Senior Solutions Manager on the Wells Fargo Asset Management Multi-Asset Solutions team explains his team’s approach.
Martijn de Vree: By listening to clients, what it is that drives them, what helps them achieve their objectives, that’s what drives us to come up with solutions for them.
Laurie King: That’s Martijn de Vree. I’m Laurie King, and you are listening to On the Trading Desk®.
We’re talking with Martijn de Vree, Senior Solutions Manager on the Wells Fargo Asset Management Multi-Asset Solutions team. Welcome to the program, Martijn.
Martijn: Thank you for having me. It’s a pleasure being on the trading desk.
Laurie: This episode focuses on an aspect of a case study that Martijn has authored called: “Running to meet a client’s goals.” If you’re an investment professional, contact your partner at Wells Fargo Asset Management to get the full paper. His case study digs deeper into the team’s journey in pursuit of alpha when alpha is the intended outcome. However, this interview is about what happens at the very beginning of their story—and that’s listening. We thought, not only does this story talk about the importance of listening, but it takes you behind the scenes at WFAM and there’s also a lesson to share with you—our audience—that you might apply in your professional and personal lives. But before we get started, I just want to ask, this story literally begins with a run, and I wondered, Martijn, if you could tell us a little bit about why you went on a run and what you were thinking about?
Martijn: Yes, of course. Christian Chan and myself, we both actually physically enjoy running. Preparing for a very important meeting with clients, as described in the case study, is a very intensive process. And Christian and I worked very, very long days to make this happen. And in order to release some energy and to balance on the day before this very final pitch meeting was we went for a sprint together in California, in San Francisco, and that was a really good moment for us to kind of reevaluate what we’ve done and get some fresh air and also get ready for the big day.
Laurie: So Martijn, you purposely didn’t mention the client by name in the case study, and we can certainly understand why. They awarded you their business, but it’s interesting that you documented how and why listening was what helped you earn their business.
Martijn: Yes, of course. Within our multi-asset team, one of the key things that we try to do is we encourage clients to look past their immediate needs, such as for example, beating a benchmark or getting a specific return. And what we really like to do is visualize what success looks like for the investor. And by listening to investors, the first conversation might be, “Hey Martijn, give me 5% return with less than 4% volatility.” But by really listening, saying, well what is it that you’re trying to achieve? Is it growth? Is it protection? Is there a specific spending or liability that you’re trying to meet? Or is it just generating income for retirement? And it’s through listening that we can find out what is the underlying objective.
Laurie: And in your story, it says the first instance of listening was your initial meeting with the client in New York City. That’s where they explain their pursuit of alpha for what was their sovereign wealth fund. Is that right?
Martijn: Yes, exactly. And their message was very clear. To paraphrase, what they basically said to us was we need to generate alpha by dynamically managing a strategic asset allocation, and we want to achieve this by using a multi-asset investment approach using tactical asset allocation. And basically, they asked us to come back and think about how we at Wells Fargo Asset Management might best achieve that for the investor.
Laurie: So you did, that’s right. And then you all went back to your team’s offices and created a solution, which the paper explains in detail. But what sort of time goes into preparing for a presentation like that? It seems like it would need to be, well, very buttoned up before you walk back into their offices.
Martijn: Yes, absolutely. To be fair, we have a well-resourced team of over 25 people who routinely create these kind of multi-asset solutions. So we’ve got clear processes set up that we follow and that we apply to addressing these kind of challenges. But still we’re talking about a project that took a few months from the initial meeting to the actual presentation of the proposal. And within the team, we got various people with different areas of expertise. That’s, for myself as a solution manager, I try to bring these various areas of resource—portfolio manager research—all together to create a holistic solution to meet the investor’s objectives.
Laurie: Well, the next example of listening happened the moment you walked back into the room during that follow-up meeting. Could you explain what unfolded with the client?
Martijn: Yes, in our follow-up meeting with the client, we were actually prepared to run through our slides. We did all the preparation, and we were planning to go through it smoothly like clockwork and hit on all the strategy’s key points and hopefully prove to them why the Wells Fargo Asset Management Multi-Asset Solutions team is best suited to solve their problem. But minutes into the presentation, they actually flipped the script, and before we really got started they said, “Okay, let’s talk about markets instead.” And that kind of put us off a little bit, and of course, we’re no stranger to market commentary, so we’re happy to oblige, but things didn’t go exactly as we were planning it, and we ended up talking a lot about markets, but not necessarily listening to the client and understanding what it is that drives their needs and how we can best help them.
Laurie: So that’s a great example. You had to think very quickly on your feet and respond to what you were hearing. In the paper, you talk about how listening came into play, and that’s because you were paying attention to nonverbal cues. Can you explain that part of the story?
Martijn: Yeah, I remember very well during the full due diligence meeting, we talked a lot about markets, and the agenda was quite packed just to make sure we met all the requirements of the investor. And by really listening and observing and seeing what was going on, I vividly remember that one of the team members from the investor didn’t speak that much. He made some notes, and I had this feeling that there was something important on his mind, but given the busy agenda and lots of people in the room, he didn’t necessarily have a chance to express this. And I believe that thoughtful expressions often speak louder than words, and by way of reading the team’s nonverbal cues, I thought he was quite an important influencer. So what we did is we took a conscious stop and we said, well actually, before we move on to talk even more about our investment process, let’s take a pause and just make sure that there’s no questions outstanding—if there’s anything we haven’t addressed to full satisfaction. It was interesting because to our relief this “listening-first” approach prompted this influential person to say, “Well, actually yes, Martijn and team, I do have a number of questions.” And we went through them one by one, and I think we addressed all the potential concerns, and by taking the time listening and also addressing any questions, I could feel that afterwards there was a whole different level of energy in the room throughout the rest of the meeting that worked very well and very positively.
Laurie: Can you tell us what kind of questions the client was asking you? I mean, I’m really curious because you’ve got this presentation that was obviously very thorough, very detailed, talks about your process, explains what you’re doing. But there was still something else that they wanted to know and that they needed to be able to trust you and believe in your expertise, so can you just take us through a couple of questions that they asked you?
Martijn: Absolutely, I think is a great question. The solution that we put together for this investor, the investor was looking for alpha and as skeptical as we are to alpha, what we’re really looking for is first of all, high quality durable alpha and secondly, diversified. And the solution that we put together had a combination of bottom-up manager alpha, using a range of different managers with complementary skills. And on top of that, we also use top-down tactical asset allocation. So there’s a wide range of alpha sources.
Now putting this together requires a bit of science and a bit of art but a lot of experience and making sure that the different sources of alpha do not conflict with each other. And it’s exactly that, how do we manage these different bottom-up managers making short-term goals and then the tactical asset allocation overlay. And that’s where we got most of the questions. How do we actually manage debt and make sure that the investor gets what they’re looking for and not a doubling up on the risk or an offsetting of it. And in order to answer that, what we did is we went into a bit more detail into our investment process—to outline exactly the steps that we go through, the transparency that we have of the positions, and then how we make sure they all add up and give the alpha that we’re looking for.
Laurie: It sounds like your team derives certain motivation and momentum from this listen-first approach.
Martijn: Absolutely. That’s what we’re here for. The Multi-Asset Solutions team, we’re not looking at products, we’re looking at solutions. By listening to clients, what it is that drives them, what helps them achieve their objectives, that’s what drives us to come up with solutions for them. So it’s very much at the heart of everything that we do.
Laurie: Well, thanks again for sharing these lessons in listening. We really do believe they’re applicable to many of those listening to our podcast. And I’d like to remind our audience to ask your partner at WFAM for the full Multi-Asset Solutions team case study. But for now, Martijn de Vree, thank you for joining us.
Martijn: Laurie, thanks for having me. It’s been a pleasure. Thank you.
Laurie: So until next time, I’m Laurie King; take care.