continues to build up steam in its institutional-caliber research initiatives aimed towards its B-D and RIA clientele.
Case in point, the Jersey City-based clearing giant, an arm of BNY Mellon
, will unveil the second chapter of its fund select list, the FundVest 200
, in time for its March fund managers' symposium.
The first chapter of this list, unveiled in November 2013
, featured fund selections in 15 categories, primarily in the areas of domestic equities, fixed income and munis.
This second chapter will focus on alternative, global and international funds, according to Sandy Motusesky Bolton
, director of financial solutions at Pershing.
The list is the product of months of labor on the part of fellow BNY-arm Lockwood Advisors
, as well as the growing manager research group of BNY Mellon Investment Management
. BNY has been steadily growing this function over the past year under the lead of both Cynthia Steer
, executive vice president and head of manager research and investment solutions at BNY Mellon
and Jamie Lewin
, Lockwood's CIO and head of manager research at BNY Mellon Investment Management.
Both Pershing and BNY Mellon Investment Management are separate organizations under the BNY Mellon umbrella.
The infrastructure has always been there, more or less, Bolton said, but it had mostly served institutional clients in the past. Now, Pershing and BNY are actively promoting these value-added research services to clients in the retail sector.
"There is a growing need for increased due diligence by our broker dealers. Obviously, advisors need more information if they are making investment decisions for their clients. Clients are definitely struggling to find a comprehensive way to review all of the products that come into '40 Act," she said.
The list will be offered for free to Pershing's B-D and RIA clients.
Who will be on the list? Don't expect the usual suspects, Bolton said. Pershing and BNY aim to make this list as distinctive as possible. For example, the focus will be on active management.
"First of all, a big difference is we are truly only looking at active managers. We are not looking to say 'Here is this index fund." We are looking at active managers who are doing an excellent job. This will be the pursuit of successful security selectors," she said.
What will the analysts look at when selecting fund firms? Well, performance will be one of the last things that they will look at. Bolton says that the analysts will be forward-looking, looking at the quality of the organization. The analysts will pore into a fund firm's process, philosophy and trading operations. There will be a quantitative element, of course, but a big focus will be on whether or not the firm follows through on what it says will do, consistently.
"The most important thing is really the qualitative and the strong belief in the organization, the management and the process. It is also really important that their performance is in line with the philosophy they say they are following. They are looking for that kind of consistency. We want to see their performance in line with that. Are they meeting the expectations of what they say they are intending to do?" she said.
Bolton said that Pershing is not just producing a list of names for clients. Seven or eight pages of supporting research on each fund will also be offered, explaining exactly why the fund was selected.
"There is a lot of documentation that accompanies the list so that advisors will really understand the investment process. They want more to understand how they will do going forward. This is really our first go at saying, we are going to take a more consultative approach, provide you more guidances based on what we have seen our clients need. We have the highest assets under management per client compared to our competitors. These are sophisticated investors. They do not want an off-the-shelf set of funds," she said.
The first two stages of this list are serving as the soft launch. Bolton says Pershing will make a "big splash" with the full list at the clearing giant's investor conference in June. At the same time, Pershing will continue to promote awareness of BNY's research functions to all of its clients.
"We have the found that the high end worth clients are much more comfortable with this approach. We are looking to push forward our advisor solutions. The mission, frankly, is to be the premier global manager research team," she said.
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