Distinguishing your distribution in difficult times June 2020

James+waterworth

It's a rough time to be in distribution but innovative executives are finding ways to distinguish themselves and their company's offerings.

​James Waterworth, who was recently awarded the MAX distribution executive of the year award for his work with iShares by BlackRock, shares his thoughts on how to cut through the noise and provide a great product in a difficult market. 

What’s the difference in working in distribution roles overseas compared to Australia?

It felt quite overwhelming when I first moved overseas and also, funnily enough, when I returned to Australia (albeit to a new city). At first, everything is different: cultural nuances, regulations, currencies, jargon, products, implementation etc. It’s sort of like learning a new language - you’re initially a little apprehensive, but as your confidence and experience grows, so too does your fluency. The commonality is also striking – while clients come in all shapes and sizes, you’re ultimately helping them achieve an investment goal whether it is income or growth. Universally, having solid communication skills and understanding your clients’ needs are key.

What adaptations have you made in the last few months to remain engaged with clients?

Over the course of this period, we developed closer relationships with our clients on both a professional and personal level. By leveraging BlackRock’s tech platforms, the transition to working from home has been very seamless. We continued to reach out and provide market support on a near-daily basis to ensure client needs are met.

Digital communication has also become second nature. We are holding regular webinars, podcasts and online meetings. All our intimate roundtable sessions are now streamed online, and it has been very well received. Of course, nothing beats picking up the phone to check in.

The Max Executive of the Year award is a great external validation of your work, as is the steady growth of iShares AUM. How do you measure your own efficacy during the course of the year?

Thank you! It is a tremendous honour though it’s ultimately a testament to the joint efforts of the wider BlackRock team. ETF education has been a key priority for a number of years now. We track the classic metrics - to measure client activity and uptake - and we do love receiving anecdotal feedback. As an example, there is nothing better than getting a client to use an ETF for the first time. Often, the usage expands thereafter.

What attracted you to equities and, specifically, iShares?

As a teenager, I bought my first stock in 1997, and I was hooked. Thereafter, I was the kid that would read the stock prices in the newspaper (remember that?) and I undertook work experience at an investment bank. I studied Finance at Uni while working part-time at an internet stockbroker, before starting my full-time career on an investment bank trading floor in equity derivatives.

When I arrived in London in 2010 after post-grad studies, I leveraged my equity derivatives background to enter the somewhat parallel world of ETFs. iShares was then, and still is, the world leader so it provided a fantastic foundation to absorb all things ETF. Many of the original pioneers were still around so their passion was infectious.

Does market instability change how you talk about ETFs?

ETFs, irrespective of market conditions, can be used to implement asset allocation decisions and make tactical adjustments to portfolios. If anything, market dislocation has highlighted the benefits of ETFs – whether it is for diversification, a cost-effective access point to certain exposures, or to meet transparency and liquidity demands. We have also continued to emphasise the quality of our product suite, team and platforms. Education around ETFs has grown too, where many investors today understand the benefits of ETFs in stressed market environments.

What changes have you seen in the industry since your return to Australia?

The take-up of indexed exposures such as ETFs have continued to excel as investors focus on asset allocation, are sensitive to fees, and their opportunity set grows. The attention to whole portfolio, in particular, and how key building blocks speak to each other has also accelerated. This emphasis on asset allocation and the resultant implementation, when you boil it down, can help build more robust portfolios.

More recently, and this is not unique to Australia, is the ultra-low rate environment and how this impacts investors’ search for income. Collectively as an industry, we are also seeing the increased interest and focus on ESG too.

What changes would you expect to see as we come out of the coronavirus restrictions and push through a recession?

Digital communication is here to stay, and we’ll all continue to adapt. I would caveat that we’re seeing some video conferencing fatigue and we are all social creatures at heart so face-to-face won’t go away any time soon. More broadly, the adage “don’t waste a crisis” springs to mind with a focus on building resilience – in both investment portfolios and business practices.

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