Attendees at Nicsa's 2020 Strategic Leadership Forum gained insight into industry trends from the perspective of distributors during the Face the Membership Part II session, on Friday, February 28.
The panel was moderated by professional investor and TV personality Guy Adami — one of the original “Fast Money Five” on CNBC’s Fast Money program. He was joined by experts from 6 Meridian, UBS, and Wells Fargo. [Note: These events took place prior to the global pandemic declaration.]
Adami kicked off the session with a fairly introspective question: Does the media make your jobs more difficult?
“The media — whether it’s the markets, politics — it doesn’t matter,” said Mike McLaughlin, Director of Business Development Group — Field Productivity at Wells Fargo. “News gets sensationalized, which is a hard thing, but it also reminds us of our true value: Calming clients down and centering them on what’s important.”
Sarah Hampton, First Vice President, Partner, Wealth Advisor at 6 Meridian, said that value propositions also serve as assurance when it comes to coping with fee compression.
“We’re not offering an opportunity for access anymore; we’re adding value by partnering with the client,” Hampton said. “If we can really show that, we don’t have to be as concerned on the fee compression side.”
Adami questioned whether the shift toward passive investment in the last three to five years has muddied the waters in terms of price discovery. “Is that why we’re seeing weeks like we’ve seen this recently?” he asked.
McLaughlin said these trends are the natural course of business. “Any time you have a disruption as we have in the last couple weeks, the beauty is that it’s a reminder that they need professional guidance as they move forward. Our clients’ lives are more complex today than they’ve ever been.”
Steven Mattus, Managing Director, Head of Global Mandates and Investment Content, Americas, UBS, said technology can help streamline the customer experience in this changing landscape.
“We’re making a big bet on technology driving our future business — our FA and client experience will be radically different from what it has been historically,” Mattus said. “As anyone knows from operating in an environment with a legacy technology platform, anytime you want to make a change, it’s expensive, time-consuming, so it’s a very significant financial commitment.”
Hampton noted that a massive amount of energy also goes into compliance with the ever-changing regulatory environment — especially when it comes to less prescriptive rules like Reg BI, which goes into effect June 30, 2020.
“In terms of defense, if you think about things that can take you off the grid, compliance is a huge issue to pay attention to,” she said. “Reg BI is very ambiguous. Make sure that you’ve prepared yourself, and that your advisors are prepared for relationship management with the client and Form CRS. There’s a lot get ready for by June.”
Mattus touched on another significant and prevailing trend in the asset management industry: diversity and inclusion.
“Managers who have had an opportunity to build teams from scratch at our firm tend to have diverse teams, and those who inherit long-established teams need to proactively seize the opportunity to promote diversity,” he said. “When someone leaves a team, the first thing the manager has to think about is how to encourage diversity. You need to be intentional.”
Note: Although the observations contained in this work represent the best thoughts of the individuals comprising the Nicsa panel, they do not necessarily reflect the views of Nicsa or any of its member organizations. Matters addressed in this work may touch upon legal or regulatory matters, however nothing herein is intended to be or should be construed as legal advice. You should contact your own counsel in order to obtain legal advice regarding these or any other matters.
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