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Rating:Seen and Heard at ICI Not Rated 1.5 Email Routing List Email & Route  Print Print
Tuesday, May 23, 2006

Seen and Heard at ICI

by: Neil Anderson, Managing Editor

Predictions, politics, praise and even impersonation were all part of the 48th annual ICI general membership meeting in Washington, D.C. last week, themed "Creating Shareholder Value."

The three-day event at the Hilton Washington featured several dozen presenters, and many of them decided to share their views on the future of mutual funds and more. Some of their forecasts:

"The tide of ever-increasing regulation and enforcement seems to have crested." --NASD chairman and CEO Robert R. Glauber

"The survival of the mutual fund industry depends on its ability to adapt." --James Glassman, resident fellow at the American Enterprise Institute

"We are projecting auto-enrollment as the standard plan design [for 401(k) plans]." --James Cornell, senior vice president of FIRSCo Plan Sponsor Strategy at Fidelity Investments

"I don’t think employee meetings [educating them on 401(k) plans] will happen anymore. We’re moving towards a more personalized experience." –Cornell

"People will be on a path to a more DB-like result." --Barry Schub, executive vice president at New York Life Investment Management Retirement Plan Services

"Age-based funds are going to grow and grow." --Schub

"The fund industry is going to flourish. Hedge funds will collapse under the weight of their ridiculous fee structure." --Don Phillips, managing director at Morningstar. Phillips also announced that Morningstar will begin publishing dollar-weighted returns in the fourth quarter of the year.

Besides looking forwards, many conference speakers praised the mutual fund industry, past and present. "Mutual funds are the most effective way for millions of Americans to achieve financial security," said John Murphy, chairman of the conference and chairman, president and CEO of Oppenheimer Funds. "The average American needs what we provide."

Presenters also had a few things to say about human nature. "I believe, at the end of the day, that investors are smart," Phillips said. "Eventually, fund companies get the shareholders they deserve."

Others were less positive, if hard to argue with. "We are of two minds," said David Laibson, professor of economics at Harvard University. "People know what they should do, by and large, and yet they don't get around to it."

Silvio Tarca, managing director of Intrepid Funds at JPMorgan Funds, pointed out that mistakes are hard to avoid. " The greater the education and the higher the level of expertise, the greater the risk of overconfidence."

In discussion of Single Premium Immediate Annuities (SPIAs), Tom Johnson, senior vice president at Mass Mutual Financial Group worried over the loss of flexibility from SPIAs. "Who wants an annuicide?" Johnson asked.

Extracurricular activities included speeches by historian Doris Kearns Goodwin, former RNC chairman Ed Gillespie, and former DNC chairman Terry McAuliffe, as well as an appearance by famed Bush impersonator Steve Bridges at the official ICI reception and dinner in the National Building Museum on Thursday night.

No idiom was safe from Bridges’ humor. "Give a man a fish, shame on you. Teach a man to fish, and he'll play knick-knack on your shoe." 

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