Morningstar Advisor - October/November 2013 - (Page 48)

Morningstar Conversation Piloting New Channels By Scott Burns and John Rekenthaler An industry weaned on the traditional sales pitch is being forced to adapt to new products, sophisticated investors, lower fees, and innovation. Exchange-traded funds, separate accounts, model portfolios, alternative strategies, traditional mutual funds—investors have never had so many choices at their fingertips. While that variety has benefits—competition has led to a gradual decline in retail fees— it also means the investing industry has been forced to react to a rapidly evolving landscape. Nowhere is the change more dramatic than the sales channel—or “distribution” in mutual fund parlance. Asset flows into 48 Morningstar Advisor October/November 2013 exchange-traded products, for example, are clear signs investors have become increasingly agnostic about the vehicle they use to fill out holes in their portfolios. Investors are demanding more information on the strategies. Today, mutual fund companies are crafting sophisticated pitches that just a decade ago would have been reserved for institutions. Jim Jessee and Rich Dion are confronting those industry shifts head on. Jessee is president of mutual fund distribution at MFS. Dion is president of Placemark Investments, which offers a platform for separate accounts, unified management accounts, and other investment vehicles. Morningstar’s John Rekenthaler, vice president of research, and Scott Burns, director of fund analysis, recently sat down with Jessee and Dion to talk about how changes in distribution are having an impact on fund companies, broker-dealers, advisors, and other industry players. Their conversation

Table of Contents for the Digital Edition of Morningstar Advisor - October/November 2013

Morningstar Advisor - October/November 2013
Contents
Contributors
Letter From the Editor
How to Make Social Media Work for You
Do Mutual Funds Still Have a Role?
More Personal Than Finance
How to Handle Your TIPS Positions
A Real Estate Veteran Starts From Scratch
Investments á la Carte
Investment Briefs
When to Say No
Take a Guarded Approach to Homebuilders
Fund Distribution Has Been Turned on Its Head. Now What?
Winning the Distribution Battle
Active ETFs Wait for Their Heyday
A Fund Firm Defies Indexing Trend
Piloting New Channels
A Good Fit
The Predictive Power of Fair Value Estimates
Does Being Prudent Pay Off?
Utilizing Utilities’ Total Return
Stuck in the Middle Is Not a Bad Place to Be
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
The Good Guys Win

Morningstar Advisor - October/November 2013

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