Worried Dutch investors call their asset managers

There are four types of investors when there is a financial crisis. Those who cannot sleep, the ‘bargain hunters’, those who do nothing and clients who just want information.

In a high-rise office building in the centre of Rotterdam, account managers for the Dutch asset management firm Robeco are advising their clients. Most of those who call between six and nine in the evening are older people who want to know what they should do with their money in view of the financial crisis in the US. They also want to know if the crisis has affected Robeco. They don’t ask outright, but make comments such as, “things must be quite hectic.”

Account manager Reinier van Dam is talking to a client who wants to sell his bonds. But Van Dam knows that he can’t sell them because they do not expire until June 2009. “Because of this crisis my bonds are now worthless,” says the client.

“I understand your doubts, but once the market overcomes its uncertainties, the bonds will increase in value,” explains Van Dam.

“That’s what Wijs & Van Oostveen [another asset manager] told me too. If I sold, I’d lose half of my capital. But I’m sorry I didn’t go ahead and sell. I had a large sum invested in Lehman Brothers. Now there is nothing left,” replies the client.

Van Dam explains the difference between shares in Lehman and the bonds which are backed by 120 listed stocks. He says there is also a difference between the US banks which have gone bankrupt and those in the Netherlands, where some write-offs have been necessary but where there is no real danger yet.

The client again: “I know I should think about the long-term. But I am getting older and in five years I want to start to enjoy life. Last year I received 10,000 euros less in dividends. And then I lost everything I had invested in Lehman. I’m getting a bit tired of the situation.”

He explains that half of his capital is invested at Robeco and the other half at ABN Amro and Fortis. “I’m starting to slowly withdraw my money. Only I don’t know what to do with it.”

Financial crisis

Robeco’s account managers say that investors can be divided into four groups when there is a financial crisis. The first are people who cannot sleep and attempt to sell their shares even if they are strongly advised not to. Then there are the ‘bargain hunters’ or ‘bottom of the barrel scrapers’ who buy shares because they are cheap. The third group are those who do nothing because they think that’s the best policy.

And finally there are clients who just want information. Wim Nieuwenhuijse, head of Robeco Direct: “People just want to be reassured. It’s like going to the doctor and asking - is it a minor illness or something worse? What we then ask is - what is your goal twenty years from now?”

Robeco Direct manages 11 billion euros for half a million private investors. These clients usually have a freely disposable income of between 50,000 and 500,000 euros.

If you call brokers, financial advisors and bank employees, they say that the credit crisis is not an issue for their customers. What does concern them, to an extent, is keeping their job in the long run, says Nieuwenhuijse.

Personal situation

They begin to talk about the situation in the US right away, but they do not see it affecting their personal situation, he says. “People cannot really make a link.”

Guus-Jan Somer of the estate agent Groot Amsterdam Makelaardij says people are more inclined to lower the asking price for their house. “The market has been cooling for the past month or so. The amount people can borrow has gone down as a result of rising interest rates.”

Nieuwenhuijse says that clients invest largely on their gut feeling. It either feels good or feels bad. “The Rabobank [the parent company of Robeco] has a respectable image.”

An elderly woman phones Robeco’s select banking division and speaks with account manager Caspar Nijland. The woman had invested defensively. Two weeks ago she withdrew the money against the wishes of her asset manager and transferred it to a savings account.

“I thought, now that so many strange things are gong on, I’d better get out,” she tells him.

“I can understand that,” answers Nijland.

“Interest rates are low. I want to put part of it aside. But only in such a way that I’ll be able to withdraw it when I want,” says the woman.

They discuss the possibilities. Finally the client says: “I also have an apartment which is difficult to sell. I don’t want to sell it for next to nothing. I told the estate agent that I’m no longer selling and am going to rent it. That way I’ll hopefully be safe for the time being.”