James V. Bowhers, John Hancock Funds' new president, has spent much of his career on the institutional side of the fund business. But that experience has proved to be an asset on John Hancock's retail side as financial intermediaries are demanding more information about the investment products they are selling.
Consider the 32-city tour that John Hancock orchestrated in September to get its portfolio managers out to personally meet brokers. The "Hidden Gems Tour" as John Hancock is calling it will run through November and features 16 portfolio managers participating in lunch and breakfast meetings across the country.
The meetings allow brokers to go back to their investors and say they have done some due-diligence on Hancock investment products. This is very similar to what institutional managers do. Investors are expecting more analysis and face-to-face meetings with portfolio managers will enable brokers to convey more information to their clients.
"Those sophisticated institutional techniques are becoming more commonplace," says Bowhers.
Bowhers has taken a post that had gone unfilled for two years after the departure of C. Troy Shaver who joined State Street Research & Management. Edward J. Boudreau, John Hancock Funds' chairman and chief executive officer, had been acting president during that time.
Bowhers is well-suited to the job. His relationship with John Hancock started when he worked for John Hancock Mutual Life Insurance Co. from 1973 to 1987. He left John Hancock for Fidelity Investments where he worked for nearly eight years- in sales and marketing for 401(k), defined benefit and foundation and endowment programs. In 1994, he joined John Hancock again, this time in the fund unit to manage sales and do product management and client service for the institutional group as well as the retirement plan business. Last year, Bowhers was named head of retail sales.
With Bowhers in charge, the company is employing traditional retail marketing schemes. So, for the first time, John Hancock Funds is advertising. A print campaign aimed at brokers through trade publications began in September. Hancock plans to expand the campaign in the future.
John Hancock has a well-recognized brand, especially on the East Coast, and Bowhers would like to develop that label across the U.S. The company is relying heavily on the advertising campaign to establish its brand but Bowhers also will depend an active sales staff out on the road in getting its products to brokers and into their clients' portfolios.
John Hancock Funds has about $33 billion in assets under management which represents about a two percent market share. Bowhers would like to increase that to $50 billion by the end of the decade.
Bowhers says that a significant difference between Fidelity and John Hancock is the relative inexperience and quick turnover of Fidelity's portfolio managers in several areas. Conversely John Hancock claims that the average investment experience of its portfolio managers is 17 years. Bowhers believes John Hancock's strength lies in this experience.
"(Our managers) have been there, done that," he said. "At least they know how to react (in unstable markets); at least they don't change their stripes."
Even with investment managers with strong track records, fund companies can do little to avoid the redemptions and investor caution that comes with the volatile market. Bowhers says that John Hancock is planning for the long run and that there are no layoffs now contemplated. He said John Hancock can afford to look long-term, in part because it has quality income offerings that become attractive in bearish markets.
"We won't be an employment factory (however)," he said. Bowhers favors management foregoing pay raises rather than cutting other positions during a market downturn to cut expenses.
Bowhers hopes that his legacy will be not only to increase John Hancock's presence in the industry, but also to develop an outstanding marketing, sales and investment staff. John Hancock Funds' parent company, John Hancock Mutual, is planning a demutualization and initial public offering within the next two years and Bowhers wants to make sure that the fund arm is a strong part of the stock sale. The fund unit is currently responsible for about 30 percent of the business of its parent company, he said.