Advance Asset Management’s blitzkrieg of marketing to financial advisers claiming it used ‘FBI methods’ to investigate fund managers was apparently more than mere verbiage.
The St George-owned manager-of-managers sent fund analyst staff to a full day training session with the so-called “human lie detector”, Steve Van Apren.
While it hasn’t led to dramatic changes in the Advance multi-manager line-up, it has been worthwhile, and staff are asking for more, Advance senior strategist Felix Stephen said. “They want another session because it has helped them so much. It has given them a better understanding of the managers they’re meeting. “We don’t hire and fire managers at random, but we are getting a better insight into their thinking. It’s a partnership – you don’t hold a gun to the manager’s head and say, you perform well. [This training] has given us better communication with the managers,” Stephen said.
Stephen believed better communication was achieved through a more rigorous and efficient interviewing technique – “a scientific approach to interviewing” – particularly given 80 per cent of communication is non-verbal, he said. “We were thinking about a little hole in our whole system that needed to be plugged and plugged efficiently. So [Van Apren] put a program together to train our managers in the techniques of scientific interviewing. They call it behavioural interviewing technique,” Stephen said.
According to Stephen, Van Apren has spent 13 years in Victorian and South Australian police departments. He was trained at Los Angeles Police Department polygraph unit, trained in the US Secret Service and the Federal Bureau of Investigation. Law enforcement authorities in the US use techniques which Van Apren developed.
Stephen said law enforcers are doing similar work to the Advance team in garnering essential information from their interviewees. “The law enforcement authorities constantly interview people to drill down or gather information about the people they’re interviewing, which is similar to us: we want the truth about the managers and we want to get more and more information about them,” he said.
Advance has not replaced its quantitative methods. It continues to run the portfolios of managers – their buying and selling behaviours and the like – through quant models “to see if the managers are true to label”, but the interview technique adds an extra layer of discretion to Advance’s choice.
