Monthly Archives: May 2016

Category: Conferences and Events, Creating Future Value, Innovation

Making Room for Innovation


“Vision without execution is hallucination.”

Walter Isaacson in his keynote address at the 2016 #ICIGMM on Thursday, May 19.

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And with that, Isaacson delivered one of the most memorable quotes at the conference.

As reported by Rob Elson with ICI, his impactful point of view and perspective did not end there.

I believe that vision is easy. We all know how to dream. The big question is having the know-how and the resources to execute, so your vision becomes innovation. Thus, Isaacson’s next memorable quote, “Innovation is vision with execution.”

Also important, Isaacson said, is having the right tools to eliminate distractions: distractions like the alphabet soup of federal and state regulations governing the mutual fund industry.

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Regulatory compliance may be the loudest form of white noise drowning in the mutual fund industry. But there are other pressures competing for firms’ innovation attention, like:

Hand holding digital globeWalter Isaacson’s keynote Q&A catalyzed one of my key takeaways from the 2016 #ICIGMM. How can we systematically and continuously ask clients what we can do to support them in executing their vision and realizing their goals for innovation?


How would you answer this question?

Share your thoughts in the comments section below.

Category: Conferences and Events, Industry Trends

Money Market Reform…The Final Countdown Has Begun


Do you remember a time before Money Market Reform (MMR)? It wasn’t that long ago when the new MMR regulations went into effect. Back then, the October 14 compliance deadline seemed a long way away. That’s not the case anymore.

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With the deadline looming, people may be feeling anxious. You wouldn’t fault anyone for feeling apprehensive, especially when you consider the complexity of MMR and what the industry was tasked to accomplish.


So when nearly 75 industry people, all deeply immersed in MMR, recently came together, there were plenty of topics to ponder. Boston Financial and DST jointly hosted the two-day Town Hall event in Kansas City, which included mutual fund clients, broker-dealers, State Street Bank, the ICI, and the DTCC.

The speakers discussed communication and collaboration, status updates and system development, and pricing schedules and timing. Throughout the two days, there were additional conversations on topics ranging from intermediary preparedness, supporting fees and gates, and specific steps to transition from a constant NAV fund to a floating NAV fund.

Town Hall attendees frankly acknowledged that a lot of work still needs to be completed before October 14. Yet, there was also a feeling of strong optimism. In fact, the consensus from those in attendance was that through continued collaboration the October compliance date will be successfully met.

Additional insights and takeaways from the Town Hall include the following.

Industry Perspective

ICI Update:

The Town Hall kicked off with a regulatory panel featuring Jane Heinrichs, Associate General Counsel for the ICI; Joanne Kane, Director-Operations & Transfer Agency for the ICI; and Jeff Cook, Director of Compliance at DST Systems, was the moderator.

Heinrichs and Kane shared their thoughts on several outstanding interpretive regulatory items and current trends in the industry, including asset movement within various money market products. Cook led a MMR SEC FAQ analysis. The discussion led to numerous questions from attendees, which was not surprising.

Heinrichs and Kane encouraged mutual fund firms to have discussions with their intermediaries on current and expected activities critical to MMR. To help facilitate this dialogue, Heinrichs and Kane provided participants with a list of implementation and operational consideration questions, compiled by the ICI BDAC/BTRAC Money Market Reform working groups. Also highlighted, were contributions from each of the four ICI working groups: 4 Decimal NAV Calculation, Intraday Processing, Fees & Gates, and Retail vs. Institutional.

RELATED: Documentation created by these groups.

Heinrichs and Kane also provided details regarding the ICI’s Money Market Reform Implementation Resource Center. The resource center, available to ICI members, provides valuable information on all aspects of MMR implementation, communication, and transition.

DTCC and NSCC Updates:

Attendees also received updates on the DTCC and NSCC MMR readiness efforts.

  • The DTCC’s Money Market Reform Best Practices and User Guide will be published after May 30, and no later than June 30, 2016.
  • Effective Tuesday, May 31, 2016, National Securities Clearing Corporation (NSCC) will implement enhancements to Mutual Fund Profile Service II. The enhancements will allow funds to communicate attributes including Money Market Fund Indicator, price strike times, and fund eligibility for fees and gates.
  • In September, NSCC will implement enhancements to Fund/SERV, Networking, and Mutual Fund Profile Service I (MFPS I).

RELATED: Documentation available here.

Systems Development Perspective

From a system perspective, it’s clear that the new regulations have far-reaching impacts. And with so many enterprise clients in attendance, development status updates were a big draw for participants. Over the course of the MMR project, as many as 15 development teams from DST have been simultaneously engaged. New functionality for intraday pricing and processing was presented in demo format by DST, which for many attendees was the “star of the show.” The demos included real-time posting of intraday prices and transactions. It was beneficial for attendees to see firsthand the end-to-end flow of information.

Pricing Perspective

As part of the second day lineup, Leo O’Donnell, Managing Director at State Street Bank, gave an update on daily pricing for FNAV Funds. O’Donnell shared a timeline that conveyed the complexity of managing this aspect of the new regulations. The visual detailed the myriad activities that need to occur within short timeframes during a single day in order to support multiple intraday price points. O’Donnell also discussed the impact to pricing schedules during an early market close or unexpected market close event.

These are just a few of the highlights from the two-day Town Hall event. As the Town Hall came to a close, attendees expressed not only an appreciation for the efforts expended by all up to this point, but also the continued collaboration that will take place over the remaining months.


Category: Conferences and Events, Creating Future Value, Industry Trends

WWMBD (What Would Mike Bloomberg Do?)


The race for the White House was on the mind of everyone who attended the opening session of the Investment Company Institute’s General Membership Meeting (#ICIGMM) at the Washington Hilton in our nation’s capital.M Bloomberg at ICIGMM 2016

The featured speaker was Michael Bloomberg, whose 75 minutes on the stage with ICI President and CEO Paul Schott Stevens covered a wide range of topics – starting with Bloomberg’s career and leadership philosophy, his role as the U.N. Secretary General’s Special Envoy for Cities and Climate Change, his analysis of primary election, and his own platform if he were to run for President (but he’s not).

When asked what he would do as President to spur economic growth, Bloomberg spoke about creating U.S. jobs in industries with strong pricing power, defending big banks, and reforming education and immigration policy. He also spoke for the need for an overhaul of tax policy to support all of the above.

“What if” thinking about the current frontrunners for the White House led me to realize that, regardless of who wins in November, it is guaranteed that the policies of the next administration will have an impact on economic growth. This typically goes hand-in-hand with interest rates.

While I’m not an economist, I do know that interest rates, like economic growth, have an impact on consumers’ ability to save, borrow, and spend. Higher interest rates typically reduce consumer liquidity, which can reduce their risk appetite. But they can also increase the demand among some consumers for riskier, high-yield, short-term investment vehicles.

I wondered, “What would Mike Bloomberg do?”

Focus Products on the Needs of Your Customers

Early in his presentation, Bloomberg said, “You have to focus your product for the needs of a particular audience; you can’t be all things to all people.” Given the competing mindsets of consumers, achieving this is a tough challenge for asset managers and their firms – they’re expected to deliver good performance, maintain and improve fund profitability, and grow market share.

Bloomberg, who said, “I may not be the smartest guy in the room, but I can outwork you,” advises firms to deliver products and services that are better than any others in the market. How does he suggest doing this? By doubling down on knowing their customers, knowing their distribution channels, and then tailoring products and market messages accordingly.

Bloomberg didn’t talk directly about the regulatory environment affecting mutual funds, but I’m always thinking about it. While it is an election year, I know the structure of the SEC is designed to eliminate the possibility of partisan politics affecting regulatory policy. Mary Jo White’s term as Complex500Chair of the SEC is not due to expire until June 5, 2019. Reforms intended to help protect consumers by increasing advisors’ fee transparency, and developing systems for managing and communicating liquidity risk will likely proceed.



How can fund companies master the increasing complexity of regulatory compliance and intermediary oversight? It might be advantageous for them to think, “What would Mike Bloomberg do?”

Leveraging Technology to Manage Regulatory Pressures

During the #ICIGMM Policy Forum yesterday, the former mayor of New York City spoke about the evolution of the U.S. job market. Ours is no longer a labor economy, he said, but rather a knowledge economy. One of the markers of this change is the explosive growth of technology, “There will be more new technology in the next three years than there has been from Edison until today.” Asset managers could be harnessing technology to manage regulatory pressures. For example, new tools for automating surveillance and reporting functions can help firms work smarter, not harder.

Keep Adding Value Through Product Development

Bloomberg’s firm’s strategy is to “…keep adding value to the product – it may be expensive, but it is valuable (to the consumer).” Understanding the implications of reforms, like the DOL Fiduciary Rule, on shareholder behavior and needs, might lead firms to accelerate the overhaul and extension of product offerings that anticipate demand for efficient management, like digital portfolio-building and advice options.

One of Bloomberg’s final thoughts was, “The more you do in life, the more life you have.” #ICIGMM continues through lunchtime on Friday. For the next 36 hours, I’m going to do as much as possible to maximize my learning, networking, and enjoyment of the #ICIGMM, one of the industry’s premier conferences. I invite you to follow Boston Financial on LinkedIn and @BFClients on Twitter for updates and analysis from the conference.

Lisa Light and Gretchen Kinder contributed to this post.

Category: Conferences and Events, Industry Trends

Planning to attend the 2016 GMM? Don’t Miss These 4 Sessions


For asset managers, competing in the fast paced global marketplace has always required long-term thinking. However, you can’t ignore current events and the business impact they can have. Take the presidential race. Everyone is talking about it, including the ICI.

At this week’s ICI General Membership Meeting (GMM) in D.C., the state of U.S. politics and how our industry may be affected has top billing. There’s also plenty of opportunity to hear expert opinions and insights on key industry issues. In addition to the GMM, the Operations and Technology Conference, the Compliance Program Conference, and the Fund Directors Workshop feature several open sessions, all of which take place around the GMM.ICI blog post

We took a look at the GMM agenda and open sessions and have highlighted some of the key speakers and sessions we’ll be attending:

Facing the Future: Fresh Perspectives (GMM)

Thursday, May 19, 9:00 a.m.

In this session, fund leaders discuss industry priorities and concerns and share their thoughts on what the future may hold for investors. Panelists include: Andrea Lisher, Managing Director, JP Morgan Asset Management; Shundrawn Thomas, Executive Vice President, Head of Funds and Managed Accounts Group, Northern Trust Asset Management; and Leslie Walstrom, Head of U.S. Marketing, Columbia Threadneedle Investments. Brian Langstraat, CEO, Parametric, will moderate the panel.

Big Data Initiatives and the Power of the Cloud (Open Session, Operations & Technology)

Thursday, May 19, 10:30 a.m.

One of the questions facing our industry is how to manage and leverage big data. Whether it’s using data analytics to help investors reach their goals or helping our own businesses make better decisions, reduce risk, and improve efficiency. It’s a big question that requires a thoughtful response. In this session, fund executives will explore the topic. Panelists include: Kyle Mallot, Vice President, DST Systems, Inc.; Sumedh Mehta, Chief Technology Officer, Putnam Investments; and Wendy L. Walasek, Executive Director, Asset Management, JP Morgan Investment Management. Julien Courbe, Partner and U.S. Asset Management Advisory Leader, PwC, moderates.

Rolling Up Our Sleeves: An In-Depth Look at the SEC’s 2015-2016 Rulemaking Initiatives (Open Session, Compliance Program)

Thursday, May 19, 10:30 a.m.

When it comes to initiatives and proposals, the SEC has been on a tear. Many of these initiatives and proposals could have a significant impact to CCOs if adopted. Moderator Alyssa Albertelli, CCO, State Street Global Advisors leads an in-depth discussion on the topic. Panelists include: Amy Doberman, Partner, Wilmer Cutler Pickering Hale and Dorr LLP; James Kearney, Principal, Global Investment Operations, The Vanguard Group; Russell Lemley, CCO, American Funds, Capital Research and Management Company; and Janet Squitieri, Global Head of Compliance, Van Eck Associates Corporation.

Operations and Technology Leadership Roundtable (Open Session, Operations & Technology)

Thursday, May 19, 2:30 p.m.

Oversight, cybersecurity, business continuity, regulatory initiatives. They’re often the mainstay of conversation within our industry these days. Cary Fuchs, Senior Vice President, Principal Funds; Lisa Shea, Senior Vice President, Northern Trust; and Michael Woodall, Head of Mutual Fund Shareholder Services, Putnam Investments will delve into these topics. Tammy Virnig, Principal, The Vanguard Group, Inc. moderates the panel.

Other Notable Highlights

Wednesday, May 18, 3:30 p.m. – Michael Bloomberg, Founder, Bloomberg LP and three-term mayor of New York City, shares his perspective on business, politics, and finance during a Q&A with Paul Stevens, President and CEO, ICI.

Thursday, May 19, 10:30 a.m. – Liz Ann Sonders, Senior Vice President and Chief Investment Strategist, Charles Schwab & Co., participates in a discussion on the current investment landscape, opportunities, and trends.

Thursday, May 19, 12:45 p.m. – Keynote Luncheon Speaker: Walter Isaacson, Author, The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution, and Steve Jobs.

Thursday, May 19, 2:30 p.m. – Lisa Jones, Pioneer Investment Management President and CEO, leads a discussion on emerging technologies and how they may affect the asset management industry.

Friday, May 20, 7:30 a.m. – SEC Chair Mary Jo White provides a regulatory address.

Look for Boston Financial this week at the GMM. Stop by our booth (No. 200). Join our conversation at @BFClients, #ICIGMM.


Category: E-Business, Technology

What Makes a Great Financial Services Website? (Hint – it isn’t bells and whistles)


A website, like many consumer products and services, is often built to impress rather than be functional. Having a lot of bells and whistles in your website may appear to make it more exciting. It can also arm the sales force with marketable information.

However, features won’t necessarily deliver more value to your customers who are looking for solutions to their challenges. Your customers want to know how your website will a) solve problems, and b) help them achieve their goals.

Car Side Shopping and Commerce Colorful Button Pattern

Consider the car buying experience. You do your research, you find your car. You’re typically focused on the core features you want, but the salespeople push extras and add-ons. You may leave the dealership with more than you planned, and spent more than you intended. And that’s when buyer’s remorse hits.

With digital product development, there’s a similar principal at play. Too many products are cluttered with features that look cool, but are rarely or never used.

Where to Start? Focus on Goals

Consider the car buying example again. No consumer would ask for parachute-like air cushions so powerful that they can break bones to be installed in their steering columns, dashboard, and side panels just for the heck of it. But, everyone wants airbags because their goal is to keep themselves and their passengers safe in the event of a collision. The goal of safety drove the development of airbags.

Web development budgets and tasks lists are typically focused on building features, regardless of whether they meet a consumer demand. It is time for digital solutions in financial services to focus on features that meet client and user goals.

This starts with understanding the behavior of your digital users, and then using this understanding to focus on what has to be done to meet those goals.

The Steps in Goal-Oriented Design: A Strategy for Understanding Your Users

What are your user’s goals? What are they trying to find out or do? This is where the three steps in Goal-Oriented Design can be useful.


Step 1: Define User Personas – This is a way to model research about people who have been observed in some way. These are not real people, but summarizations based on observations.

Step 2: Define the Persona’s Goals – What are the objectives that these personas are looking to fulfill by using this product?

Step 3: Mock Up Persona User Scenarios – These are journeys which lead to a persona’s interactions with the product to achieve their goals.

RELATED: Want to learn more about using personas as part of your goal-oriented design process?

Goal-Oriented Design can help you understand the experiences that will get your users furthest along in their goals. From there, you can identify what digital features your business needs to serve your customers, and which features might be unnecessary.

A simple example can be found in a financial services website. One of the primary persona goals of shareholders is to review their latest account activity. It leads to a journey to the transaction history feature. However, companies frequently create a separate feature to allow shareholders to view their last dividend payout.

Following the Goal-Oriented Design model will reveal a more concentrated approach with less time and money being spent on features that will be used infrequently, if at all. And by understanding customer problems, the sales conversation can be about promoting how well those problems are understood and how the product provides the best solution. That is a more powerful conversation than any list of features.