Monthly Archives: May 2015

Category: Conferences and Events

Are you sick of millennials yet?


A few months ago I attended an annual client meeting along with a number of leaders from across our organization. There weren’t any surprises in our state of the industry discussion; shifts in distribution, growing market share of passive strategies, diversification through alternatives (and need for education), the regulatory compliance buzz of the moment, and my personal favorite – millennials. As the conversation turned to this confounding generation that shares too much online, listens to numbing electronic dance music, and would rather take an Uber than own a car – the gazes in the room peered in my direction, looking for validation and feedback on their attributions. (Un)fortunately for me that day I quickly became the authority on the topic as the only card carrying member of the 18-34 year old millennial generation  in the room.

That scene has played out countless times over the past six months, so it was no surprise to hear “millennial” as one of the most obsessed over buzzwords at this month’s ICI conference. Generation X and the Baby Boomers seem to stare in awe of this generation and the opportunity to access their hearts and minds before the millennials can fully do it on their own.

Millennials are subject to examination by fundsters from all walks – product development, marketing, distribution advice and service. Each area must think about how millennial preferences will impact their business and how to take advantage of that change. The biggest fundamental challenge facing the industry is they really don’t have any money yet making the ROI case difficult. However, this 70 million deep cohort stands to inherit $1Trillion annually over the next 10-15 years (Jenny Johnson, Franklin Templeton Investments) – in other words, the largest transfer of wealth in the history of the U.S.  Eventually they’ll earn on their own too. In fact, at the ICI conference, Indra Nooyi of Pepsi certainly highlighted the desire to move high performing millennials into the positions currently cemented by Gen X’ers.  This class is rising by virtue of their curiosity, persistence, ambition – and with a dash of manifest destiny, they are becoming the most key demographic for the industry.


The behavior exhibited by millennials is quite different. Having weathered two economic crashes (and two last second Patriot super bowl losses to college roommates from New York), they are much more sensitive to costs and more risk averse in their finances (than they may be on Tinder). They also prefer technology as a primary means of interaction, allowing them to conduct the research, execute the strategies and take the credit (preferably not the blame) on their own.  In a 2014 Wells Fargo study, 77% of millennials indicated that they had the financial knowledge to address any financial problem over the next ten years – perhaps coming from overconfidence (a result of the participation trophy), or delusion (Entourage episodes), or Google (Search: how do I…). Despite supplying TMI on their 6-10 social media outlets, this generation will be cyber super sensitive to the information they don’t want public, like their iPhone photo library and finances I suspect (though tools to manage them will grow more robust and ubiquitous, i.e. OpenFolio, Mint, etc.).

Millennials will bring significant changes to our client’s businesses and both directly and indirectly to our business model as a transfer agent shareholder service and recordkeeping provider. Not much mail is coming in these days from millennials (where do you buy stamps?). The fund industry needs to continue to shift their business model to adapt to these coming changes, hopefully they ask the millennials and begin to transform their strategies before the millennials take their seat – or worse, their market share (hello Wealthfront, Betterment, LearnVest, Acorns, Robinhood, etc.). Until then, at least some rooms will (hopefully) have a voice of from the generation in it.

Category: Creating Future Value, E-Business, Industry Trends, Technology

Have It Your Way: Meeting the Needs of Empowered Consumers


Thought leadership is more than marketing jargon at Boston Financial. For us, thought leadership tells the story of what we think about changes in the industry, and what we are doing about them.

Boston Financial’s Creating Future Value series is discussing how we are responding to industry megatrends by moving away from the classic, transaction-driven transfer agent model in favor of a smart servicing model that positions clients for growth in the changing economy.

Follow this monthly series by subscribing to Boston Financial’s Perspectives blog.


We live in a society that moves quickly. Information is available from a variety of channels on TV, our tablets, phones, wearable devices and more. Whether you’re ordering food for delivery, moving money at your bank, depositing a check, researching a new purchase, or buying a pair of shoes, the expectation is that you can securely do what you want to do, on a device that you choose, whenever you want. And every time these online transactions are executed well, you feel empowered by your devices and the experience.

What is also happening is that an expectation is being set that every digital transaction should be fast, simple and satisfying.


The financial services industry knows that the bar has been set high – by your “do-everything” search engine, your favorite online shoe store, your virtual travel agent, your bank, even your insurance company. We also know that, unlike online retail, our industry is highly regulated with many safeguards to keep assets safe and secure.

Playing in this space isn’t easy, but at Boston Financial, we’ve done some great things to bring our online product solutions up to date with the expectations of the empowered consumer in the digital age in mind. This has been accomplished through redesigns of existing secure websites, increasing the number of functions and information available online, and making secure sites mobile-friendly – all with a modern user experience. The driving factors in developing these capabilities were to (a) make it easier for our clients’ investors to do business with the fund company, (b) increase brand perception, and of course, (c) meet and exceed shareholder expectations.

Given the regulations in the industry, some transactions still require the human touch. We are working hard to bring some transactions that require documents, forms, medallion guarantees, and other requirements into the 21st century. Our online bank verification process is a great example of learning from what is being done by online banks, Google Wallet, PayPal, eBay, and others, then applying it to the mutual fund industry. The result is an online, self-service bank verification process that will meet the self-service demands and expectations of our clients’ shareholders.

The best back office solutions are modular, meaning they may be adapted to meet multiple needs. They are also scalable, meaning they expand or contract with the needs of the client. What’s next for Boston Financial is turning our digital lens inward and adapting our 21st century digital capabilities for internal use. We’ve spent considerable time, effort, and research in creating e-business tools that are simple to use – bridging multiple systems with modern interfaces. We are now analyzing how we can apply the technologies and user experience research to make improvements to other internal business processes and more importantly, help our associates better serve fund company shareholders and advisors.

The transfer agent industry is often criticized for being slow to adopt new technologies. For good reason, as complex regulations intended to protect shareholders’ assets are not keeping pace with the digital evolution. Most of us in the industry have tackled the low hanging fruit – simple transactions that can be securely managed through self-service Web portals. The next phase invites us to look beyond the easy processes and develop secure and compliant solutions that offer consumers opportunities to grow and protect their assets both on their terms and at every step of their relationship with their fund company. This type of planning is already being done in some sectors of the financial services space, and it’s our job to push, pull, and drag this work into the transfer agent side of business. From every angle, this is smart servicing in the 21st century.


Read other blog posts in the Creating Future Value series:

The Impact of Megatrends to the Transfer Agent Model

Prepared for Whatever Comes Next: Creating future value in compliance programs

Looking at the Big Picture: Leveraging the power of data

Facing Industry Challenges Together

Category: Webinar

The Folklore of Finance: How to Make Better Investing Decisions


FOF1Saturday mornings as a kid, I’d cozy up to the TV, cereal bowl in hand, watching Fat Albert and the Gang. Invariably, my mom would say, “You’re sitting too close to the TV. You’re going to hurt your eyes.”

Back then, I wasn’t the only kid who was told by a well-meaning parent about the evils of sitting too close to the TV. Parents have been saying it for years, and they continue to preach it. But it’s folklore.

Folklore is powerful, pervasive. And it can be flawed.

Recently, I had the chance to attend a webcast hosted by Boston Financial, “The Folklore of Finance, How Beliefs and Behaviors Sabotage Success in the Investment Management Industry.” Suzanne Duncan, senior vice president, global head of research for State Street’s Center for Applied Research (CAR) and her colleague, Sean Fullerton, senior research analyst for CAR, discussed their latest research, including why the industry and investors need to develop a “new” Folklore of Finance to achieve future success.

Why should the industry care about the folklore that exists in finance today? It greatly influences investors’ and investment professionals’ behavior- even dominates their decision making according to Fullerton. When the beliefs are useful, they can have a positive effect; however, when flawed, they can be detrimental, even cause us to do things that aren’t in our best interests or the interests of our investors.

Take the Folklore of False Comfort, one of three distinct folklores within the industry identified by Duncan and Fullerton. According to Fullerton, the Folklore of False Comfort is about looking for comfort in the concrete and measurable while avoiding things that are abstract and difficult to measure.


Our industry’s tendency to overuse concrete tools, such as benchmarks and fund rating systems, is an example of the Folklore of Comfort in action. It can cause us to ignore the constant uncertainties of the market, putting investors and investment professionals at risk, notes Fullerton.

Another takeaway from CAR’s findings is that both investors and investment professionals need to re-evaluate their definitions of success. Institutional and individual investors say the reason they invest is to reach long-term goals. Yet very few of them actually define success as reaching those goals. Meanwhile, the industry is hyper-focused on alpha. According to CAR’s findings, the industry spends more than 60 percent of its capital on the pursuit of alpha.

Duncan and Fullerton recommend the industry reallocate resources to maximize value in the areas of both alpha and the achievement of long-term goals. They also advocate that the industry should instill a new folklore, or belief system, that works toward both of these goals.

If you’re an investor, or investment professional, the Folklore of Finance may be influencing you, and you may not even be aware of it.

Interested in learning more about the Folklore of Finance, and what it means to the future of the industry? Download the full report: The Folklore of Finance: How Beliefs and Behaviors Sabotage Success in the Investment Management Industry. Or reach out to the Center for Applied Research directly at