Events

02NOVAll Day03All-Council Fall Summit Highlights

29SEP8:00 AM2:00 PMRoundtable | Portfolio Construction (New York) - Highlights Now Available8 AM - 2 PM ET

Event Details

Industry leaders gathered for an in-depth roundtable discussion on portfolio construction Sept. 29 at Federated Hermes in New York. Catch up on the discussion with session highlights below.

Host:

Participants

Discussion Highlights:

FUSE Research Network Advisor Survey Highlights

Mike Evans | Partner & Director of Advisor and Benchmark Research | FUSE Research Network

View FUSE Presentation Slides

Approximately 20% of advisors solely use home office models without any outside customization/support – i.e., 80% of advisors need or benefit from portfolio construction services partnerships (PCS)
1/3 of advisors met with PCS teams and 1/3 of those meetings led to product sales
The ratio of wholesaler meetings leading to product sales is significantly lower than 1/3
Less than 10% of advisors want a consultation from a wholesaler directly – i.e., more than 90% of advisors want to interact with a PCS specialist
Advisors are using multiple PC fund firms
Risk identification and tax-loss harvesting reinvestment/rebalancing are the most compelling for PC engagement
Advisors prefer quarterly or semi-annual PC consultations
30% of consultations lead to product sales
Close rate is higher among female advisors (50%) compared to male advisors (30%)
Risk exposure analysis is cited as a top reason for engaging in PCS
Advisors are using multiple PC fund firms

Roundtable Discussion – Metrics

The percentage of portfolio construction services (PCS) meetings leading to a product sale over a given time period vs. the percentage of typical non-PCS interactions
Investigating the mix of PCS product sales vs. non-PCS product sales
Investigating the results of long-term/routine/recurring PCS clients vs. one-time and/or non-PCS clients
Correlating territory sales rank vs. territory PCS usage volume
Tracking win size and tracking top wholesalers vs. bottom usage
Most teams aligning by territory found the pros outweigh the cons
Teams looking to enable sales force for digital tools/iPad
Digital PC engagement tools for salespeople
Continuous PC advisor working relationships
Working with advisors before their investment committee meetings
Sales correlation analysis of most active PC salespeople

14SEP8:30 AM3:00 PMRoundtable | ESG (Philadelphia) - Highlights Now Available8:30 AM - 3 PM ET

Event Details

Industry leaders gathered for an in-depth roundtable discussion on ESG Wednesday, Sept. 14 at abrdn in Philadelphia. Catch up on the discussion with session highlights below.

Host:

Participants

Discussion Highlights:

Quantitative and Qualitative ESG Factors—A Balancing Act

Moderator: Pamela Meenan, Senior Marketing Manager, Institutional | abrdn
Benjie Elston, Director, Head of Sustainability | White Marble Consulting
Chris Fidler, Senior Director, Global Industry Standards | CFA Institute

When developing taxonomies for ESG, try to leverage common metrics with clear disclosure.
Ultimately, expect asset managers to drive this taxonomy discussion (or perhaps third-party data providers) rather than regulators.
Ratings continues to be an issue including the low correlation between prominent ESG ratings like Sustainalytics, MSCI, etc. Some offered the best practice view of adding the metrics that support the ratings in addition to ratings.
Regarding internal working group structures and ESG oversight committees, a common theme was to ensure a wide net is cast by function and region while attempting to keep groups as nimble and productive as possible.

Is the Geopolitical & Economic Environment Hurting the Cause?

Moderator: Barry Gladstein, Head of Sustainable Investing | Macquarie
Stephen Byrd, Managing Director, Head of Global Sustainability Research | Morgan Stanley
Matt Apkarian, Associate Director, Product Development | Cerulli Associates

Most of the geopolitical concerns stem from polarization on the ESG topic in certain U.S. States. This phenomenon is causing a temporary pullback among some firms’ product, distribution, and marketing staffs vis-à-vis ESG discussions.
There is still a long runway for improving advisor acceptance and use of ESG. According to Cerulli data, only 12% of advisors bring up ESG to clients proactively. Another 44% will bring up if the client raises the topic first.
There are a variety of reasons advisors don’t discuss ESG, including home office prohibitions, lack of understanding, no conviction, and the need for more performance proof points.
From a demographic perspective, there is opportunity for ESG in the future, especially with younger investors who may be willing to sacrifice returns for impact (at least in theory).
Cerulli sees lots of potential for SMA’s and products or services that leverage technology for mass customization.
Ultimately, we need to turn the conversation into one that focuses on risk reduction and use of ESG factors to make investment decisions just like other factors that have been part of a portfolio manager’s toolkit for years (e.g., p/e ratios, cash flow analysis, etc.).

ESG Regulatory Outlook

Moderator: Jeff Vorwerk, Strategic Projects, Portfolio Director | Principal
Christine Lombardo, Partner | Morgan, Lewis & Bockius LLP

Flexibility is a dual-edged sword with SEC regulations on ESG. While the SEC may not always be overly prescriptive, the disadvantage is the subjectivity of enforcement based on hindsight.
Expect final rules in next six months – likely after midterm. Implementation will likely be one year to 18 months thereafter. Do not comply prematurely, but keep in mind what could be coming.
From an SEC enforcement perspective, anything is material when it comes to ESG. Enforcement actions can be mitigated with crisp and clear disclosure.