SOUND ADVICE ON CALL
Asia chief of JP Morgan Asset Management began his career in a call centre, where he learned the value of quick thinking and versatility. By Genevieve Cua in Singapore
Working in a call centre, fielding calls from time-pressed and often irate clients, is typically dismissed as a dead-end, tedious job. But Dan Watkins is proud of his humble start in asset management more than two decades ago. He worked for nearly five years in the 1990s at a call centre in a town near London, and has since risen through the ranks since to become Asia Pacific chief executive of JP Morgan Asset Management.
When he started at the firm in 1997, the traditional route to top executive roles was via the graduate trainee programme, a career path that most still follow today.
“In my (current) role, I support graduate intake programmes or analyst associate programmes,” he says. “They are of tremendous value. By rotating people through different functions they get to experience the broader business.
“But equally I’m quite proud that I didn’t come in on the graduate programme. I joined in a call centre role and mapped my career from there.
“I’m very fortunate to have been given different opportunities, very fortunate to have been with JP Morgan where opportunities arise. I’ve learned some lessons along the way. I can’t recall turning an opportunity down.
“When I was given an opportunity and it didn’t feel right, my approach was to give it a go. You get learning experiences from the roles you enjoy and roles you don’t necessarily enjoy. You have to add value where you are.”
Mr Watkins graduated from the University of York with a degree in politics. He worked for a year as a research analyst supporting UK members of Parliament, but he quickly concluded it was not enough to sustain a long career.
“I loved politics, it’s one of my passions,” he says. “But I realised quickly that I was going to benefit learning something else, an industry or trade. I also had an interest in economics … so finance was a logical step.”
He joined JP Morgan in 1997. As a call centre operator his job was to speak to 100 customers a day. He wore a headset that would beep when a call came through. It was his first immersion in dealing with retail investors.
“I loved it. It was one of my favourite jobs,” he recalls. “There is something about talking directly to a retail client. When that beep in the ear goes off, you want to make sure you know what you’re talking about.
“The client could ask, where do I send my application form? And with the second beep you could be talking through the economic situation in Latin America. You have to put in the work to answer those questions. I can assure you, you’d learn very quickly. It was a fantastic learning process for me.”
What about dealing with irate clients? Mr Watkins acknowledges the role is “reasonably
When you want to develop your management style, go into a function where the people doing the work know a lot more than you. It’s a great way to develop because you have to find a way to add value
stressful”. A call centre operator, he says, “must listen”. “That’s the overriding training you get. It makes such a difference if the other person at the end of the line is making the effort to truly listen and to understand what your question or concerns are, to hear your frustration.
“It’s such an important learning process, to take that conversation from the learning and listening into resolving client issues. They were good calls to do when you turn a frustrated customer into a happy one.”
In 2001, he moved into operations, a back-office function that occupied him for another four-plus years. This time he dealt with the institutional side of the business. “I was producing NAVs (net asset values) for funds; I was a fund accountant and also a transfer agent.
“If you sent in an application to invest into a fund, I placed that deal with the registrar. … Suddenly I was learning the world of brokers, custodians, and engaging with portfolio managers which gave me the other important side of the business.”
He became a technology manager for Europe, the Middle East and Africa (EMEA) in 2005 in charge of a staff of 40 to 50 in Glasgow, despite having little background in technology. It was then that he began to hone his management approach.
“What I learned was that I had a group of people who wanted to be motivated and led, with a strategy to move toward,” he explains. “They were the experts and what they looked to me for was leadership. That was a really defining experience for me in my management style.
“When you want to develop your management style, go into a function where the people doing the work know a lot more than you. It’s a great way to develop because you have to find a way to add value, and the way to add value is to help people and their careers. Develop and represent them in the broader business.”
He says his management style is characterised by the importance of communication, or “signposting to people along the way where we are, what we’re doing and where we’re heading”.
“I like to be accessible. I work better in an open environment, a flat structure where we all have a role to play,” he says. “As you get more senior in an organisation you have a very important role to lay out a strategy and vision so people know why they come to work.
“I genuinely believe people want to know where they fit in an organisation, the role they play and that they’re contributing to a bigger goal, vision and strategy. Accessibility and a clear vision leading a group of people – hopefully that’s what people will say of me.”
He notes the sea change that has occurred in how companies approach technology between the time that he managed the division and today. In the mid-2000s technology was still seen as a support function, to execute functions on instruction from management. Today, he says, technology is at the “top table” and is pivotal to companies’ success.
“Technology today is at the table, part of the strategy, not taking instructions but linking arms with management and delivering the strategy with you. That has been a very healthy change. The firms that understand this set themselves up for a better chance of success.”
The unit that he used to manage has grown to be the largest technology employer in Scotland, with a staff strength of around 2,000. Last year, JPMorgan Chase & Co announced the construction of a new state-of-the-art technology home with the capacity to employ up to 2,700 people. The centre will open in 2022 and support global operations. Stephen Flaherty, managing director of the Glasgow Technology Centre, was a member of Mr Watkins’ original team in Glasgow.
Mr Watkins believes that while a digital strategy is a must, it is important to be “crisp” about what such a strategy means. In his view, there are four ways to bring clarity. One is the role of digital in a company’s internal operations, which should ultimately result in more efficiency and lower-priced products. He expects asset management to benefit from operational efficiencies wrought by technology.
A second area is digital as it applies to the intermediaries that an asset management firm engages with. This includes banks and financial advisers. “McKinsey believes that in a few years 50% of flows into asset management will come from digital channels. How can we help those intermediaries with their capabilities?
Can we supplement them, or engage with them differently if they are engaged digitally with clients? That’s an area we need to be thoughtful about.”
A third is tech advancements such as artificial intelligence (AI) that are already transforming money management. Fourth is engaging with clients digitally. “We have a direct business in Hong Kong and Taiwan and we have to have top digital capability to serve those direct investors in the same way that banks need digital capabilities. … If you get all four areas right, you’ll be in a very good position.”
Meanwhile, from his vantage point at the helm of the firm’s Asia Pacific business, he says JP Morgan aims to expand its asset management market share in all markets in the region. “Asia is incredibly important strategically to our global asset management business. … You have to listen and be aware of different events and issues, and keep in mind the context of the likely short-term impacts on markets and individual investors. The importance of keeping a long-term perspective when you manage a business in Asia is incredibly important.”
Despite geopolitical risks, Asia’s growth story remains resonant. “Today 50 percent of (economic) growth flows from Asia. If that trend continues and all industry benchmarks suggest it will, Asia will grow as a proportion of the global business,” he says. “So you have to be very focused on your long-term strategy goals and decisions. When you react to events, that usually doesn’t produce the best results.”
As at the end of December 2019, the firm’s assets under management (AUM) for Asia Pacific grew by US$26 billion to $192 billion. The region saw net new flows in Asia of $13 billion across retail and institutional clients. Institutional assets grew by $20 billion to $103 billion. Globally, JP Morgan Asset Management had total AUM of about $2 trillion at the end of 2019.
China is a major linchpin of the Asia strategy. The firm reached an agreement last year to take a majority stake in its joint venture, China International Fund Management (CIFM), which was established in 2004.
“I’m incredibly blessed to have that joint venture to work with,” says Mr Watkins. “Our onshore Chinese asset management company is a huge part of our strategy. … I’m benefiting from decisions of 10 to 15 years ago, and the decisions I now make have to be for the long term, that my successors will benefit from in the next 10 to 15 years.
“The China story is fascinating. That market will continue to liberalise. The last three years were quite significant. If the next next three years are like the last, it will be an amazing story and opportunity for firms, and will help Chinese investors.”
While the ongoing Covid-19 outbreak will seriously set back the Chinese and global economies — this interview was conducted quite early in the outbreak — Mr Watkins is taking the long view.
“The reality is we don’t set our business objectives on a 6-to 12-month view,” he says. “We’re committed to growing our China presence over the next several decades. We will adapt to the circumstances as needed, but we’re not structurally altering our business strategy, which remains focused on growing our presence across Asia Pacific and expanding onshore in China.”
In China and elsewhere in Asia, some trends are positive for the asset management business. Demand for retirement solutions, for instance, is likely to intensify as populations age.
“The whole area of retirement is an evolving space. There isn’t a homogenous approach across Asia. I think one important role for us to play is to make sure we’re at the forefront of talking about retirement and its framework and solutions with policyholders, regulators and government authorities. There is an opportunity for Asia to learn from the rest of the world and get the retirement story right.”
One challenge in Asia, he says, is to get investors to take the long view and not succumb to short-term uncertainties.
“The second challenge is to get people not to over-reach,” says Mr Watkins. “This is a market that likes yields, income and a payout. I’m learning that. We have to help our clients with life-cycle retirement plans so they retain enough capital for the income they need.”
Technology today is at the table, part of the strategy, not taking instructions but linking arms with management and delivering the strategy with you. That has been a very healthy change