John Strohman, CExP™, CFA®

Interesting title. But relationship management is a crucial role for asset management organizations. This person represents the organization and should be the one with whom the client identifies. Over time, evolving into a trusted client adviser. And eventually, a client advocate.

When I started, the business model was known as “Manager of Managers”. Today, the contemporary descriptor is “Outsourced Chief Investment Officer”. Both terms pertain to the investment management oversight of… Show more

Interesting title. But relationship management is a crucial role for asset management organizations. This person represents the organization and should be the one with whom the client identifies. Over time, evolving into a trusted client adviser. And eventually, a client advocate.

When I started, the business model was known as “Manager of Managers”. Today, the contemporary descriptor is “Outsourced Chief Investment Officer”. Both terms pertain to the investment management oversight of an institution’s funds, ensuring they are invested in an appropriate manner - given their goals, objectives, and risk tolerance.

I describe my role as client advocate – understanding the client’s perspective (the ‘Jack of All Trades’ idea) and bringing the appropriate organizational resources (the ‘Master of None’ concept) together to serve the needs of the client. These resources may include asset liability analysis, asset allocation recommendations, portfolio implementation, and periodic portfolio reviews.

The economics of retaining and growing client relationships is far more cost-effective than finding a new client. Maximizing long-term revenue for an asset management firm is the primary objective of relationship management.

OUTCOME | I nurtured over 35+ client relationships, representing approximately $3 B in assets and $11MM in revenue without client departures.

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We were a boutique money manager and subsidiary of a global investment management firm. The organization had attractive investment strategies. Two had not achieved the appropriate level of visibility and focus they deserved. Leadership chose me to collaborate on a solution.

I pulled all parties together into a cross-functional team for a candid discussion on the status quo – distribution heads, marketing resources, product management, portfolio managers, and corporate training. I focused… Show more

We were a boutique money manager and subsidiary of a global investment management firm. The organization had attractive investment strategies. Two had not achieved the appropriate level of visibility and focus they deserved. Leadership chose me to collaborate on a solution.

I pulled all parties together into a cross-functional team for a candid discussion on the status quo – distribution heads, marketing resources, product management, portfolio managers, and corporate training. I focused the players on how we could work together to not only raise awareness but embark on collaborative effort to raise assets in these strategies.

The task proved quite daunting, given the degree of complexity of each investment strategy and the different perspectives of the 8 participants. I framed the issue before us as “How can we best address everyone’s viewpoint while, at the same time, maintaining the integrity and consistency of our investment story?”

We chose an iterative brainstorming process to crystalize our core message. We gathered insights, ideas and tactics, both internally and externally. These were tested and either incorporated, discarded, or enhanced via feedback from the assembled team. We developed a flexible “pitch book” (a fluid narrative) for our business development partners.

My role now shifted to that of the “road warrior”, traveling extensively nationwide promoting our simplified investment strategy message to prospective investors and internal partners.

OUTCOME | Our joint efforts raised the profile of our organization, our capabilities, and our investment strategies. We also raised approximately $800 MM in net assets. This still stands as the largest raise in the company’s history!
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It’s a universal issue in the investment world – making the complex simple.

We faced a straightforward task – create a concise, clear story promoting our complex investment strategies (for both external prospects and internal partners) that was succinct, yet thought provoking.

We assembled a cross-functional group of stakeholders (e.g., product management, marketing, investments, and several heads of distribution groups). Our focus had traditionally been on the institutional… Show more

It’s a universal issue in the investment world – making the complex simple.

We faced a straightforward task – create a concise, clear story promoting our complex investment strategies (for both external prospects and internal partners) that was succinct, yet thought provoking.

We assembled a cross-functional group of stakeholders (e.g., product management, marketing, investments, and several heads of distribution groups). Our focus had traditionally been on the institutional marketplace. This venture was new. I shared my operating creed, “Know what you know and know what you don’t know”. We sought their opinions.

A robust discussion. Many shared a diverse viewpoint. Many challenges surfaced. Each stakeholder offered up their own perspective based upon the constituencies they served. Some sophisticated. Some less so.

I realized my experiment had morphed into a “many-headed Hydra”. All had great intentions; but it proved difficult to formulate a “least common denominator.” The primary issue: many external constituencies with varying levels of sophistication.

Empathy became a unifying concept. We all rallied around ‘putting ourselves in their shoes’ and understanding their perspective. How would the benefits and features of these specific strategies work in a portfolio context? What would be the improvement in the overall investment portfolio by adding one of our investment strategies to the mix? In the best-case scenario, why would our strategies be superior to something an investor already owns?

OUTCOME| I shaped and influenced all parties in formulating answers to these questions and a crafting a narrative that became the official “story” for the group. I did several “road shows”, traveling extensively to build awareness of our strategies with our internal partners and external prospects. They saw the power of the narrative - enabling us to raise nearly $1B of new assets.

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Our organization had developed a clear and concise story promoting our complex investment strategies. We wanted to leverage the distribution capabilities of our parent company but needed to further educate the parent company’s sales force, particularly those distribution groups that dealt with more sophisticated prospects.

Leverage was desirable - I could only be in one place at a time.

The goal was for me to coach the sales team so they could “talk the talk” and create curiosity… Show more

Our organization had developed a clear and concise story promoting our complex investment strategies. We wanted to leverage the distribution capabilities of our parent company but needed to further educate the parent company’s sales force, particularly those distribution groups that dealt with more sophisticated prospects.

Leverage was desirable - I could only be in one place at a time.

The goal was for me to coach the sales team so they could “talk the talk” and create curiosity amongst prospects. We partnered with corporate training and the key heads of the distribution channels to devise a half-day seminar. We utilized more institutionally-oriented marketing materials.

We wanted to make the training more dynamic. It needed to go beyond just reading from Power Point slides. We knew that was less effective. We knew that interactive conversations would prove to be more powerful. My colleague and I role-played in front of the audience, illustrating how to best germinate and evolve the 1:1 sales conversation. We even roleplayed a list of potential objections and how best to handle them.

OUTCOME | I was the only person at my company proficient in these strategies. But I was constrained. I couldn’t simultaneously be making multiple presentations at the same time in several places. (I’m good, but not that good.)

So, the impact of our training was empowering these indirect sales teams to tell “our” unique story, in a different manner, consistent with their audiences’ level of sophistication. I coached and trained them so that we could leverage the “power of an extended sales force” with maximum effectiveness.
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My largest client experienced some employee turnover associated with key departures. We had established strong and deep relationships, which we hoped would prove helpful in navigating some turbulent waters. The stakes were high. We managed approximately $3 B in assets on their behalf (our largest client).

Leveraging my relationships, I quickly determined that a substantial portion of the assets under management were at risk. A new sheriff came to town, bringing a different perspective… Show more

My largest client experienced some employee turnover associated with key departures. We had established strong and deep relationships, which we hoped would prove helpful in navigating some turbulent waters. The stakes were high. We managed approximately $3 B in assets on their behalf (our largest client).

Leveraging my relationships, I quickly determined that a substantial portion of the assets under management were at risk. A new sheriff came to town, bringing a different perspective on investing. The client’s philosophy was evolving, due to a shift in ‘risk appetite’. I immediately shared this information with leadership in pre-emptive fashion to prepare us for the worst.

Our fears proved true, when we met with the client. Concerns existed regarding how our strategy fit within the context of their portfolio construction. An open-minded dialogue produced an understanding and appreciation of the other’s perspective. The strong relationship that I had cultivated enabled the client to propose a “fresh start”. The client asked us to consider how we would manage these assets under a different risk profile – the ‘hot button’. This proved a unique opportunity because, when a client announces, “I want to go”, they go. (Not on my watch!)

I functioned as a liaison between the client and our investment team. I advocated for the client’s needs, sharing their concerns with our investment professionals. Our investment team then conducted research to determine what measures must be taken satisfy the client’s wishes.

We offered relevant proposals, one of which the client accepted, staying with us for a substantial period. In the meantime, because the assets remained with us, our organization retained about $3 MM in revenue.
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Investment management firms live or die by raising assets. The process of bringing new assets under management is likened to a single-elimination athletic tournament. No matter the sport, it’s for all the marbles. It involves several stages, following a linear path through the ‘brackets’ and demanding hard work and huge investments of time. It all culminates in playing for “the” championship.

The finals are typically played in front of a group comprised of pension board members and their… Show more

Investment management firms live or die by raising assets. The process of bringing new assets under management is likened to a single-elimination athletic tournament. No matter the sport, it’s for all the marbles. It involves several stages, following a linear path through the ‘brackets’ and demanding hard work and huge investments of time. It all culminates in playing for “the” championship.

The finals are typically played in front of a group comprised of pension board members and their consultant(s). Each ‘finalist’ presents their best case, detailing why their firm and their tailored investment strategy provides the best solution.

By this point in the ‘march to the championship’, each finalist is well-vetted. Most likely, they find themselves in a dead heat, tied with each other in the eyes of the decision makers. The tiebreaker always comes down to the prospect needing to meet those investment professionals to whom they potentially will entrust the management of their constituents’ assets.

And that’s when I enter the ‘game’ to make the complex simple. I’m known internally as the designated CLOSER!

I typically get 20 to 30 minutes to discuss my organization, the recommended investment strategy, and why our firm should be selected over the other candidates.

Questions always run the gamut, being extremely high-level and/or detail-oriented, across several topics, including investment approach, organizational stability, and compliance-related issues.

OUTCOME | Over a period of several years, I successfully closed >$200MM of new assets for my firm following this ‘game plan’. These ‘wins’ represented about 65% of the new business activity for my organization. What makes this a remarkable outcome is the fact that these assets were raised during a particularly challenging environment for quantitatively-oriented asset managers - in the midst of the financial crisis of 2008!
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