Touching down in the Mile High City, I was blown away by the mountain views and most importantly the lack of traffic compared to my last trip to Atlanta!
I started my day meeting Tracy Pike (pictured), head of subadvisor oversight at Charles Schwab Investment Management. She heads a team of five in the subadvisor selection unit, who oversee $17 billion assets under management. They work with around 25 to 30 managers and are split by asset class.
The firm offers subadvised mutual funds as well as a full suite of open-architecture target-date funds in both a collective investment fund and mutual fund format.
After being thoroughly informed about Schwab’s subadvisory selection process, I headed downtown to catch up with the Envestnet team.
Tim Clift, chief investment strategist at the Tamp, oversees the team that builds and maintains a platform of strategies used by 52,000 financial advisors managing $227.2 billion of mutual fund assets.
Stephanie Hagglund, a former Q&A star and all-round friend of the magazine, kindly set up the meeting, and I was able to hear from a few members about their areas of focus for the rest of the year and the trends they’re seeing in the industry. Pictured left to right: Ed Zablan, Michael Wedekind, Dan Homan, Brandon Rick, Brooks Friederich, Eric Halverson, Amelia Garland, Michael Manning, David Hawal, Michael Gebhardt and Ryan Knisely.
Brooks Friederich, senior vice-president and director of fund strategist portfolios, is seeing demand from advisors for low-cost, fully diversified solutions. As a result he is currently searching for more Department of Labor (DOL)- compliant multi-asset portfolios.
On the fixed income side, David Hawal, vice-president and senior investment analyst, told me he expected to see demand for bonds despite the continued equity bull run and recent rate rises. He believes the tide will turn and investors will want to get back into bonds.
‘Despite concerns about low yields and rising interest rates, the strong run in equity markets may ultimately reinforce the importance of fixed income as a portfolio ballast,’ he said. ‘When equity markets eventually reverse course investors may want the diversification bonds provide.’
Michael Gebhardt, associate vice-president and investment analyst on the equity due diligence team, is currently looking to uncover small-cap money managers who possess the ability to generate positive alpha over a full market cycle.
‘I use the term “uncovering” because the challenge here is that the small-cap space is generally capacity constrained, so good managers who also have ample room for asset growth can be difficult to find,’ he said.
Gebhardt believes within this asset class it is important to seek out sound managers ahead of the masses, which can allow investors to enjoy any ensuing success alongside the portfolio managers before they become too large to accept new money.
My last meeting of the day was with Jordan Chapell at Wells Fargo (pictured).
Chapell is a senior investment analyst at the Wells Fargo Investment Institute responsible for domestic equity due diligence. The equity team puts together a list of strategies that is then used by broker-dealer Wells Financial Advisors, Wells Fargo Private Bank, family office Abbot Downing and pension service Institutional Retirement Trust.
Kevin Sullivan heads up the equity team and the analysts are spread across Hong Kong, London, St. Louis, Charlotte, San Francisco, New York, Raleigh-Durham and Denver.
Each analyst covers around 40 long-only strategies; however, the team’s research coverage will likely increase post DOL rule. Over the past year, in addition to preparing for DOL and adding to capacity constrained asset classes, Chapell’s team has focused on finding compelling environmental, social and governance (ESG) products.
While the team has not seen significant flows here yet, they have seen many new products launch each quarter. Chapell’s team has also been discussing the best ways to position active management and passive funds in client portfolios.
The next day, I started off back at Charles Schwab, but this time to meet with the investment advisory arm at the firm.
I caught up with past cover star Michael Iachini and his team (pictured). Iachini is the head of manager research responsible for Schwab’s Select lists, which play a key role in both its $1.3 trillion advisor business and $1.5 trillion direct investor division. It’s a giant task putting together the best-buy lists of exchange-traded funds (ETFs) and mutual funds, so I got to meet more of the team who help out.
Emily Doak is a senior research analyst who performs ETF selection and monitoring for the ETF SelectList and Schwab Intelligent Portfolios. Ashley Pfeifer is a senior research support analyst, who is more of a generalist and helps out with the team.
Art Kochinyan is an ETF analyst who assists with the ETF Select List alongside Doak and Brett Bennett is the head of separately managed accounts (SMA) research, with four additional members on his team.
Bennett and his team are currently focused on finding an ESG fixed income product, which has proved to be a difficult search, while Doak and the ETF team have been researching smart beta ETFs.
Before heading to the airport for my flight back to New York, I met Bob Downing (pictured) at National Planning Holdings (NPH), a network that consists of four independent broker-dealer firms.
The four that make up the network are Invest Financial, Investment Centers of America, National Planning Corporation and SII Investments.
Downing is the associate vice-president of traditional investments at NPH. He is responsible for the mutual fund focus lists, analysis of third-party managers and due diligence on investment products used at the broker-dealer network.
Downing, along with seven others on the due diligence team, is responsible for the research that is distributed through the advisory business. The analysts are split by asset class and coverage area. There are 3,307 advisors between the four broker-dealers and each one acts independently and can go off the recommended list, which consists of 130 mutual funds.
The trends the team have seen this last year are demand for ESG strategies and more ETF solutions, as advisors look to lower client fees.
My name is Amelia Garland and I am a relationship manager at Citywire. My aim is simple: to get to know professional buyers across the US and engage with heads of manager due diligence, directors of investments and anyone who selects third-party products for their platform.
I am constantly on the road. If you would like me to pay you a visit, please don’t hesitate to get in touch at email@example.com or give me a call at 646 532 6301. Don’t forget to tweet @GarlandGoesWest if you would like me to visit your city.
Next stop Minneapolis!