Todd James of BSI Hong Kong explains a typical day for a product gatekeeper within a private bank, including the activities, challenges and responsibilities, as well as how to be successful in this role.

Date: Nov 2011

Tags: Investment adviser, Portfolio management, Asset allocation, Portfolio construction, Communication

• Todd James runs the investment team, looking at individual investments for clients and overseeing portfolios for them
• Approximately 75% of his time is spent looking internally, with the rest spent meeting clients, presenting ideas to them and working with them to discuss their views
• The role has changed a lot in the last two to three years – it involves more scenario analysis, more documentation and more administrative generally
• Success means being able to communicate clearly with clients, to demonstrate knowledge about the broader markets and at a micro level, and to do effective due diligence on investments

Within the private bank, Todd James said in an interview that he runs the investment team, which basically looks at individual investments for clients and makes recommendations to them, as well as overseeing portfolios for individual clients.

Essentially, he explained, it’s a link between the relationship manager and the client, acting as a conduit to the market, what is going on and where there are opportunities to invest.

Daily activities

On a day-to-day basis, James said the first thing he focuses on are the general trends, what’s going on during that day in terms of economic numbers being released, and what to expect in terms of the potential impact on the markets.

Then it is about planning the day ahead and looking for investment opportunities, he added. This might mean looking at buying stocks or bonds of individual companies, or evaluating different funds based on the team’s views on the market – to present these opportunities to clients.

James said that approximately 75% of his time is spent looking internally, with the rest spent meeting clients, presenting ideas to them and working with them to discuss their views, adding that it is a two-way relationship.

Changing role post-crisis

According to James, his role has changed quite a lot in the last two to three years. For example, it involves more scenario analysis, more documentation and more administrative generally.

There has also been a shift towards working with clients to manage through market downturns, he added, focusing on looking at their overall portfolio, and how they should diversify and position themselves for when markets go up.

It’s no longer about picking stocks and making good returns over a short period of time, said James. Instead, it’s about making good returns over a long period of time, protecting the downside and being positioned for any upswings on the upside, he explained.

Skills for success

To be successful in this role, James said it is important to be able to communicate clearly with clients, to demonstrate knowledge about what is going on in the broader markets as well as at a more micro level, and to do effective due diligence on individual investments.

Although clients have very focused views, they don’t tend to have global views or access to relevant information, he added.

Being able to look at portfolios from a diversification and portfolio perspective is also important, said James, as clients typically don’t do this.

In particular, one differentiating factor is the level of communication with clients, added James, especially during bad times, where more communication leads to a greater amount of trust.

This means calling them and giving them information about what is going on even in bad times and even when there is no clear market direction, he said.

Main challenges

The biggest challenge in this role relates to looking at expected returns. Clients, explained James, particularly in Asia, are quite demanding and believe they can get 20% returns per annum.

While this might be possible during bullish markets, it also involves a lot more risks, but many clients still don’t understand what a relatively good expected return is, or what the associated risks are.
 
A career in this type of role

To be able to develop a career in this type of role within a private bank, James said people need to be able to take in a lot of information from the many news channels and other sources out there, and then see how the views are formulated and how they view investment over the longer term.

Focusing on portfolio management is also critical, rather than individual stocks, to differentiate yourself and add value to clients.