Executive Summary

The rep-as-portfolio-manager (“RPM”), or rep-as-PM, business is growing rapidly and is quickly evolving from a niche to a mainstream strategy. The catalyst for the recent ascent of the RPM business was the market downturn, when financial advisors1 (“FAs”) increasingly began to recognize the need to manage client accounts more nimbly. It became clear that discretionary relationships that also provided practice scalability, greater efficiencies, and control and tactical flexibility could offer a solution. Over the past five years, the technology and tools curve has trended sharply upward, which, in providing greater efficiencies in the operation of the business, has facilitated the FA’s ability to convert to discretionary practices.

This research paper focuses on the burgeoning RPM segment of the Managed Solutions business. Among the topics we examine are the evolution of the RPM segment, the drivers of the recent rapid expansion, best practices for investment management firms (product manufacturers) to effectively tap into this growth, and future trends.

  Download the Trends in the Rep as Portfolio Manager Business (1.2 MiB)
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The MMI Gateway to Leadership Class of 2011 Interns graduated with honors. Each of the students gained real work experience in their respective firms and garnered praise from their employers.

The closing ceremonies held at ING’s offices featured speakers from the program’s partners; UNCF, NAACP, MMI as well as current-year students and alumni. This year’s business case competition challenged students to analyze and pick investment solutions with the winning team attaining a double digit return.

Sincere thanks to all of the sponsoring firms and congratulations to our Class of 2011. We look forward to working with you in the future.

  MMI Central 3Q11 (1.3 MiB)
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Advisory Solutions see Net New Sales of $60.3 billion
During 2Q 2011 advisory assets grew slightly by $71 billion or 3.1%. This compares to a market return of 0.1% – according to the S&P 500. The UMA market segment grew the fastest at 7.7% to reach $139 billion in assets under management. Other segments increased consistently with the overall industry. The SMA market grew 2.0%, beating the overall market growth rate.

September 20, 2011

The U.S. Department of Labor has recently signaled a delay in implementation of a rule that expands the definition of “fiduciary role” in retirement planning.

Labor sought to protect those saving for retirement from advisor conflicts of interest, such as steering clients toward investments with higher fees.  In a MMI comment letter prepared by John Ehringer, General Counsel at Placemark, we noted that Labor’s proposed regulation cast too large a net and unintentionally may apply to those firms providing money management services (but not advice) to investors.

Assistant Secretary of Labor for Employee Benefits Phyllis Borzi stated earlier this week that a re-proposal could be released early in 2012.

 - Chris Davis, Money Management Institute

Why Gateway to Leadership?

Impact investing is a new investment strategy that has now been deemed an asset class [J.P. Morgan Global Research and The Rockefeller Foundation, Impact Investments—An Emerging Asset Class].

Impact investment programs aim to solve social or environmental challenges while generating financial profit. Although similar in strategy to socially responsible investing, which utilizes portfolio screens to filter investment pref- erences (including the often-called “sin” stocks), impact investing utilizes a more aggressive, alpha-seeking approach akin to hedge fund strategies.

To read more download the article below. 

  Impact Investing Briefing Report (406.3 KiB)
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MS Assets Reach $2.3 Trillion

During 1Q 2011 advisory assets increased $162 billion to $2.3 trillion representing a quarterly growth rate of 7.6%. In comparison, the S&P 500 was up 5.9% for the quarter and the Russell 3000 returned 6.4% for the same period. UMA advisory and rep as portfolio manager programs had the highest growth rates. UMA assets were up 10.8% (when adjusted for restatements) to $128 billion and RPM assets increased by 11.8% driving assets to exceed the $400 billion mark.

  MMI Central 2Q11 Final Release.pdf (1.3 MiB)
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  MMI Central 2Q11 - Early Release (1.1 MiB)
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During 1Q 2011 advisory assets increased $162 billion to $2.3 trillion representing a quarterly growth rate of 7.6%. In comparison, the S&P 500 was up 5.9% for the quarter and the Russell 3000 returned 6.4% for the same period. Market indices are simply used as relative benchmarks against which to compare industry growth rates. According to reported sales figures, the advisory industry took in $81 billion in net new sales which represents 50% of the growth for the quarter. See Exhibit 6 within PDF. Rep as portfolio manager and mutual fund advisory programs saw the most significant inflows with $24.5 and $20.9 billion respectively.

View Presentations from the Toronto Conference  

 Agenda.

IMCA accepts 5 CE hours (toward CIMA®/CIMC®/CPWA® certifications) for the June 2nd,  2011 MMI Asset Gathering: Advisory Solutions  in the Canadian Marketplace. Please contact IMCA directly for the Program ID needed for completing the application for credit.

Certificants who attend the program are individually responsible for completing and submitting the CE form,http://www.imca.org/main/do/ReportCIMACE, in order to receive CE credit.