2018 MMI Chairman and President Report

To: MMI Members
From: Patty Loepker, Chair, MMI Board of Governors
Craig Pfeiffer, President & CEO
Re: 2018 MMI Chairman and President Report

Download Report (PDF)

In 2017, MMI marked our 20th anniversary and reflected on two decades that have witnessed significant change and evolution in the advisory solutions space. This year, our focus has been all about moving forward and helping member firms to navigate this period of profound transformation in our industry. Like you, we are energized by the opportunities that lie ahead. Despite the challenges, there has never been a more exciting time to be in the advice business.

In our third decade, MMI remains fully committed to advancing the future of investment advisory solutions, to serving as a trusted resource to our member firms, and to enabling, facilitating and shepherding industry leadership and growth.

As we close the year and look ahead to 2019, here is a review of the six key pillars of MMI member benefits and services - with highlights of some of the important initiatives we have been working on: 

Membership Experience - As a member-driven association, everything we do revolves around delivering a superior membership experience and valuable services.   
  • Membership - In a period of industry consolidation, membership remains strong at 161 firms. A look at the underlying numbers validates MMI's unique place in the industry and the continued relevancy of our mission. Retention stands at 91% on an annual basis, 78 firms have been members for 10 years or more, and we've added 16 new members year-to-date. With advisory business becoming a more important driver for many firms, we gained new members this year from the ranks of prominent industry consultants, small- and medium-sized asset managers, and the bank channel. The entire MMI organization benefits as the membership grows and diversifies. If you know a firm that would be a good candidate for membership, please contact Arlen Oransky at aoransky@mminst.org.
  • Engaging New Communities - Connectivity and alignment are critical to the functioning of any ecosystem - advisory solutions included. Some of our major initiatives this year focused on engaging segments of the advisory community that have not historically been involved directly with MMI. For example, the MMI Center for Distribution Excellence, launched in June, provides an industry first - a resource hub and community for industry sales professionals to share information, develop new competencies, and learn from the "best of the best." Similarly, the Sustainable Investing Initiative is marshalling investment and distribution experts from across the sustainable and ESG spaces to educate financial advisors and prepare them to respond to growing client demands for investments that reflect their values.   
  • Conferences and Events - Our 2018 conference calendar was a busy one - with 14 different events and 16 MMI-hosted webinars. Our two signature events - the Sales & Marketing Leadership Summit and the Annual Conference - generated industry buzz, packed houses, and outstanding reviews. The inaugural Women in Distribution Symposium brought a highly energized and motivated group of more than 50 female sales professionals together in Chicago in early September, and we partnered with Morningstar to host the first live event under the banner of the Sustainable Investing Initiative, a successful forum for financial advisors. Demonstrating that MMI's conferences truly offer "something for everyone," 151 of our member firms attended at least one event in 2018. Among the other ten, two are based in Japan and get a pass!

    Planning is already well under way for 2019. New events on the schedule will include a series of one-day workshops, kicking off in January in conjunction with the Sorenson Impact Center at the University of Utah's David Eccles School of Business, aimed at accelerating financial advisors' understanding of impact investing. We'll also be convening a CTO-level briefing and discussion on advisory technology during February in San Francisco.

    Amidst the bustle of year-end and the holidays, don't forget that registration is now open for the Sales & Marketing Leadership Summit on March 28-29 at the Mandarin Oriental in Miami - and circle October 14-16 on your calendar for the 2019 Annual Conference in Atlanta. 

  • Recognizing Member Engagement - The involvement of individuals at member firms is critical to MMI's mission and success. To recognize firms that demonstrate a high-level of engagement and participation by individuals across a broad range of MMI activities, two special awards were presented at this year's Annual Conference in Dallas. The MMI Chairman's Award and the MMI President's Award, which will become an annual tradition, distinguish member firms that exemplify the spirit of "Member@Member." The inaugural Chairman's Award (for firms that have been MMI members for three years or more) was presented to Voya, and the President's Award (for firms that have been members for less than three years) was presented to FS Investments. Congratulations to both!
Education & Professional Development MMI continued to dedicate significant resources this year to the build-out of a robust suite of online learning resources for our member firms' investment professionals. With development now complete on several cornerstone curriculums, we are transitioning from "building the shelf" to go-to-market activities.
  • State-of-the-Art Education Platform - The delivery platform for MMI's educational offerings is the MMI Continuous Learning Center, a robust learning management system powered by Kaplan SmartPros. The Center provides simple, one-stop access to the educational suite, which includes foundational, intermediate and advanced level curriculums on different topics and geared to different audiences. If you have not yet had an opportunity to visit the Continuous Learning Center, you may do so here. In addition to "home-grown" courses developed by MMI and its members, you'll find curriculums from such leading organizations as CAIA, CFA Institute, Investments & Wealth Institute, PRI Academy, and US SIF - with many offered at a discount to MMI members.
  • Special Introductory Pricing on New "Fundamentals of Investment Advisory Solutions" - MMI is pleased to announce the launch of a new curriculum that many member firms have been waiting for. Fundamentals of Investment Advisory Solutions is an eight-course series (3.5 hours of content) that offers a 360o perspective on the rapidly evolving advisory space. Combining core concepts with real-world insights, the curriculum is ideal for anyone who would benefit from a deeper understanding of the advisory business, including new hires, customer service associates, and team members taking on new functional roles. To celebrate the launch, we are offering MMI member firms special introductory pricing of 35% off the retail price through December 31, 2018. Learn more here.
  • New Sustainable Investing Online Curriculum Now Available - The first tranche of courses in the new Sustainable Investing Online Curriculum is now live as well. Comprising three hours of content, the courses are designed to educate financial advisors about sustainable investing topics and prepare them to engage with clients and incorporate values-based investing into their practices. The development of these courses would not have been possible without the expertise and financial support of Morningstar, the Presenting Sponsor of the Sustainable Investing Initiative, and our Lead Sponsors, Bank of America Merrill Lynch, Calvert Research and Management, and FlexShares - we thank them for their many contributions. Learn more here.   
  • MMI Wealth Management Essentials to Debut in Q1 2019 - Another exciting addition coming soon is MMI Wealth Management Essentials. Presented in collaboration with the SS&C Learning Institute, Wealth Management Essentials includes 30 fast-paced online courses that offer a foundational understanding of financial markets, the investment products landscape, principles of investment management, relationship sales skills, fundamental business skills, and other key concepts. This curriculum is suitable for any employee beginning a career in wealth or investment management. Think of it as Chapter 1 for new employees - with Fundamentals of Investment Advisory Solutions as a logical next step. Learn more.  
  • Wholesaler Training Center Fills Marketplace Gap - MMI's Wholesaler Training Center, added a second sleeve of webinars earlier this year. Series 2.0 expands on the original curriculum of 20 pre-recorded webinars with nine additional webinars that provide wholesalers with research and strategies to enable high-impact advisor engagement and more effective client conversations. A growing number of MMI member firms are turning to the Wholesaler Training Center as a cost-effective training and coaching tool for their sales teams. Learn more.   
  • Would You Like a Demo? - We're interested in connecting with the Learning and Development or Training professionals at your firm. Please make an introduction for us! We've added a dedicated sales specialist to present the full spectrum of offerings in the Continuous Learning Center and help member firms construct custom programs to suit their unique training needs. Please contact Chad Papanier at cpapanier@mminst.org for more information or to schedule a demo of any of the curriculums.
Analysis & Insights - MMI is officially out of the "data business" - hence the new name for this pillar - but we remain firmly committed to delivering informed analysis and actionable insights to our member firms.
  • MMI and Cerulli Consolidate Industry Data - We're pleased to announce the successful transition of MMI's industry data platform to Cerulli Associates. Effective with the Q3 2018 reporting cycle, Cerulli has assumed responsibility for all data collection and reporting functions previously performed by MMI, and the combined data set is now branded as MMI-Cerulli Advisory Solutions Data. This new arrangement is exciting on several fronts. First, combining our efforts will allow MMI and Cerulli to generate unmatched insights and thought leadership on advisory trends. Second, it has allowed MMI resources to be redeployed against other strategic priorities.
  • New "Advisory Solutions Quarterly" and Online Data Portal - After months of behind-the-scenes work, members can now experience the first tangible deliverables of the combined MMI-Cerulli platform. Advisory Solutions Quarterly, the replacement for MMI Central, provides a quantitative snapshot of the advisory solutions marketplace in a fresh, updated layout along with timely analysis from the Cerulli research team. In addition, for a deeper dive into the data, MMI members that contribute their advisory solutions data to Cerulli on a quarterly basis now have access to the new MMI-Cerulli Advisory Solutions Data portal through Cerulli's online Lodestar platform. Learn more.
  • "MMI Journal" Showcases Topical Content - To help member firms stay abreast of emerging trends and important issues impacting advisory solutions, we launched the MMI Journal of Investment Advisory Solutions in early 2018. Published digitally twice a year, the Journal curates and presents some of the best third-party reports and articles on key advisory topics. Our first two editions have featured content from a host of subject matter experts on topics as diverse as behavioral alpha, the impact of AI on the role of the fundamental analyst, and future winners in China's asset management industry. Our next edition will be published in early 2019. View the last edition here and contact Joan Lensing at jlensing@mminst.org with questions on submissions.
  • Joint Research with Industry Partners - MMI also continues to partner with subject matter experts on joint research projects to illuminate specific topics of interest to member firms. Examples include our recent special brief on Distributor Due Diligence Teams, produced in conjunction with FUSE Research Network, and upcoming projects with Casey Quirk and TIIP.
Next Generation Initiatives - Preparing the next generation of industry leaders is critical to the vitality of our member firms, the MMI organization, and the financial industry. This pillar of activities focuses on attracting young, diverse talent to our industry and positioning them for career success.
  • Leadership Pathway Launches Fourth Class - The new 2018 class of MMI's Leadership Pathway program was introduced at the Annual Conference in Dallas. Launched in 2015, more than 100 extremely accomplished and committed young professionals are now part of the Leadership Pathway network. Through this structured two-year program of leadership development activities, the participants have acquired new skills and built lasting relationships - with each other and with their mentors - that will benefit them throughout their professional careers. For more information on Leadership Pathway, contact Hilary Fiorella at hfiorella@mminst.org.
  • Gateway to Leadership Pilots Two New Models - Dedicated to improving the diversity profile of our industry, MMI's Gateway to Leadership Foundation, which provides career awareness and workforce readiness training for minority college students, gained new momentum this year. A significant step was the hiring of a full-time program manager - Shewanna Grasty - who joined MMI this summer. Next was the development of two pilot programs designed to more effectively prepare qualified students for a career in financial services and then connect them to hiring firms for internships and entry-level employment opportunities. We have launched a university-based model with Metropolitan College of New York and a city-based model with a consortium of member firms and universities in the Philadelphia area. Early results from both models are promising, and we will keep you informed of our progress. Member firms interested in engaging with Gateway should contact Shewanna Grasty at sgrasty@mminst.org.  
Industry Advocacy and Partnership - As the "voice" of advisory solutions, MMI works with a range of stakeholders to represent the industry on important issues and promote the role that advisory solutions can play in helping financial advisors and investors achieve better outcomes. 
  • Speaking Up on Regulatory Issues - Through the efforts of the MMI Legal & Compliance Committee and our retained counsel Morgan Lewis, MMI continues to provide real-world input to industry regulators and policymakers on issues that impact advisory solutions. A notable example is the detailed comment letter prepared and submitted in response to the SEC's proposed Regulation Best Interest.  
  • Recognizing Leadership and Innovation - The 2018 MMI/Barron's Industry Awards, presented at the Annual Conference in Dallas, honored firms that have raised the bar by delivering ground-breaking advisory solutions and related programs for financial advisors and investors over the past year. A record number of nominations were received this year in ten different award categories. MMI congratulates all the nominees and the 2018 winners: Advisor Group, AllianceBernstein, Envestnet, Horizon Investments, Legg Mason, Morgan Stanley, Morningstar, and Russell Investments. We also saluted Jim Tracy of Morgan Stanley, who was honored as MMI's 2018 Advisory Solutions Pioneer.
  • Consistent Media Presence - MMI's media relations efforts continued to bear fruit this year, with our proactive outreach resulting in positive exposure for MMI - and our member firms - on topics as diverse as sustainable investing, the future of advice delivery, and attracting and preparing young professionals for careers in our industry. By deliberating adopting a higher media profile, we continue to provide informed perspective on important issues and showcase the critical solutions our industry provides for investors.
  • Forging Industry Partnerships - As we seek to broaden MMI's reach and engage with new audiences, we are forging deeper relationships with other industry groups as well as within our member firms. As a result, you will see MMI represented at more high-profile industry events and actively engaged with other organizations on a variety of fronts.
Association Governance MMI took important steps this year to solidify our operating model and position our organization for future success. 
  • Term Limits Enacted to Ensure Board Rotation - In May, the MMI Board of Governors formally approved a phased transition to six-year term limits for firms in order to manage Board composition and provide more opportunities for participation at the Board level. The term limit rotation will begin next spring, with five firms that have already served for six years randomly chosen to rotate off the Board in May 2019, and others annually thereafter. (The ten largest sponsor firms are exempt from the term limits.) Board membership was also expanded this year with three new firms assuming seats: Horizon Investments, Morningstar, and USAA. The expansion of the Board - and the orderly implementation of term limits - ensure broad participation and fresh input and perspective on Board matters.
  • Investing for the Future - Bolstered by growth in net income from conferences and other non-dues revenue sources, MMI continues to invest judiciously in staffing and strategic priorities like our education initiatives and the new Center for Distribution Excellence. The decision to transition our data collection and reporting activities to Cerulli also allows us to reallocate resources to other activities that are more central to our member value proposition.
  • Leveraging New Technologies - Just as technology is impacting virtually every area of financial services, it is also having an impact at MMI. In 2018, we deepened our use of event technologies to streamline planning and execution and enhance the attendee experience. We also deployed Harvest, a digital content platform, to launch our new online communities tied to the Sustainable Investing Initiative and the Center for Distribution Excellence. The Harvest platform offers an efficient mechanism for MMI members to distribute their thought leadership content to other members - and we plan to make broader use of this state-of-the-art platform next year. Stay tuned for more information on how you can participate and showcase your firm's subject matter expertise.

Thank you for taking the time to review this report. As long as it is, it just scratches the surface of the many activities and initiatives now under way. Stay tuned early in the new year for the announcement of an MMI All-Member Town Hall Web-Meeting. We will provide more detail on these initiatives and highlight other ways MMI can help you and your firm to Connect, Know, and Grow.

From all of us at MMI, a sincere thank you for your ongoing support and partnership. Happy Holidays!

Patty Loepker                                     Craig Pfeiffer