Please introduce yourself.
My name is Wessel Schouten. I am from Wervershoof, which is a village nearby Hoorn, but during my studies I lived in Amsterdam. Just like you guys, I have done the bachelor Econometrics at the University of Amsterdam. I’ve finished my bachelor’s degree in three years, whereafter I did a master’s in Financial Econometrics. The year after that I started a master’s in Actuarial Science following the Risk track. When I found out that passed courses would remain valid for three years, I decided to go to Australia for 6 months. I went to the University of New South Wales in Sydney and completed a minor in Computer Sciences.
In 2014, I started working as a working student at Willis Tower Watson (WTW) within the Retirement department. The Retirement department is the biggest department within WTW. At that point in time, I was a second-year bachelor’s student. I have been employed at the Retirement department until I went to Australia. Coming back from Australia, I started working full-time at the Investment department, which is somewhat smaller than Retirement. This switch was not because I didn’t like working at Retirement anymore, but at a certain point I found myself working on cases within Retirement, but overlapping with the Investment department. During those cases I felt more drawn towards Investment. What is also nice about Investment, is that it has its foundation in England. Therefore I work closely with people in the UK. Last week, for example, I was in London to do a training.
Are working students common at WTW?
Yes! In general, we welcome every student, provided that this student meets certain requirements and has the right capacities. WTW is an employer who would be happy to offer you a initial position from where you can grow further within the firm. We actually see this growth happen quite often. So, to answer your question: yes, working students are common within WTW.
What kind of work did you do as a working student?
The same as a junior, whilst taking into account that you work only two days a week. This is quite a lot, especially for a student. I personally needed a little less time to study, so, early on I was already working a bit more by myself. In the end it just depends on how flexible you are. In principle, you conduct the same work as a junior.
Did your study material and your student job overlap? Did one benefit from the other?
Answering this, I can only refer to my period at the Retirement department. Regarding study in general, you will not encounter much actual actuarial work in the initial phase of your bachelor's degree. You are just taught a basis. Also, during the courses of your bachelor’s, you mainly learn theoretical things. I had chosen a number of courses during my bachelor’s in which more practical things were reflected. And during my master's in Actuarial Science, I sometimes saw things come back literally. That was nice, because I learned the most through WTW. At WTW you also learn how things are put into practice, and for which problems you need which specific tool. On your exam you naturally want to calculate this and that, while at work you get more feeling and deeper understanding. That will help you.
Now you are a full-time investment analyst. What does this position entail and how does econometrics come into play?
There are many different topics within Investment. If you come in as an analyst now, you’ll be fully trained and included in various projects. I think that is an advantage, because you specialize a little later, hence you get a broader picture of what happens within the department. I am often involved in analyzing the strategic policy of, for example, a pension fund. This involves assets that need to be invested, because pensions have to be paid in the future and the participants pay a premium now. Otherwise, due to price inflation, the value of these assets would decrease. Investing is necessary, so that you can distribute your participants indexation, but we also have to take the risk into account. The risk cannot be too high, since we’re talking about pensions, which people will claim at higher age. We cannot lose the money. So, what are we doing? Pension funds often invest according to a strategic investment plan. Based on that, we analyze the data, taking into account their future cashflows: what are their obligations in the future? What do they have to pay to their participants? What do they still receive as premiums? What are their investment results? etc. Then we will look at their risk, their return, what is the amount that must be paid when people are retired? What is their purchasing power in relation to inflation? These kind of questions must be answered.
What is the income model of WTW?
For the consultancy that WTW offers to investment funds or to pension funds, WTW receives a small commission. We also have a number of funds nowadays. We have an entire institute in England that does a lot of research into what the best investments are. We naturally advise pension funds. We then proceed to a selection process where we advise where to invest. As a result, we have a fairly wide range of companies that we can analyze. To name a fund that we have: it selects the 10 best managers who are actively investing in shares. Based on statistical evidence, we then find what the best is in the market. And if you invest money as a pension fund, we will receive a performance fee.
Do you experience a lot of freedom within your work at WTW?
Absolutely. The main thing is that we all have to do it together, certainly in the investment department, which is a somewhat smaller department. So you cannot refuse all projects or transfer them to others. But from the start I have indicated where my interests lie, so, if a project I’m interested in comes up, WTW will work with me to see if I have the time and space to work on that project. In that respect you can certainly make a mark. As an example: when I was a working student I indicated at some point that some parts of a project from investment seemed interesting to me. WTW was flexible and allowed me to be involved in those projects. In addition, I am also chairman of Young WTW, which is a board of 3 people with a committee around it. Together we organize activities for young employees of WTW. We recently had the cross-lob event, where different cases from different departments were discussed and investigated. This gave all the younger WTW employees an insight into what other departments do. The turnout for that event was also quite large, which shows that WTW has many young people.
What about growth opportunities and outflow?
Every company has some outflow, but what we notice and what we are happy with is that many young WTW employees, such as working students, stay and grow within the company. That is of course also the aim of such a working studentship.
To what extent are the consultations based on raw data and / or based on economic theory?
Advice is based on a combination of both data and theory. As a company, we naturally look at what is happening in the market. What do we see ourselves? If the data suggests one thing, but theory shows the other, then we will take that into account or perhaps adjust our model. But despite that, our advice is strongly based on data. Of course also because we have included economic theory in our models.
As a consultant you are of course also busy adapting investment portfolios and therefore you have market knowledge from your work. Can you take that knowledge home for your private investments?
No. Since 2018, legislation on that has been tightened. You also have to take the bankers oath if you work here. In addition, we have to take exams linked to the Dutch Central Bank and the Dutch Authority for the Financial Markets which test our integrity. This all results into the fact that we cannot trade with inside information. Moreover, we are obliged to state it, if we are making private investments and also which investments they are.