Oppenheimer Funds and Putnam Investments have won top honors in the 11th annual NOVA Awards for innovation in the investment management industry.
James Tracy of Morgan Stanley Wealth Management, has been selected the winner for Visionary Leadership. Charles Rizzo of John Hancock Investments received an honorable mention in this category.
The NOVA Awards program is a joint effort by Money Management Executive and NICSA, the nonprofit trade association that provides educational programs and other information for the operations sector of the global investment industry.
Each year, MME and NICSA conduct a call for nominations. Entries are submitted to an independent panel of eight industry experts recruited by NICSA who select the winners. Awards are given for Innovation in Customer Experience, Creativity in Marketing, Back Office Efficiencies and Visionary Leadership.
The awards were presented at NICSA's General Membership Meeting on September 20 in Boston.
VISIONARY LEADERSHIP: WINNER
Jim Tracy: Morgan Stanley Wealth Management
Jim Tracy, director at Morgan Stanley Wealth Management, is being recognized with the NOVA for Visionary Leadership for his three decades of innovation in the investment advisory business that has combined financial planning and investment advisory businesses over the past year.
Tracy, who took over as director of Morgan Stanley's Consulting Group Wealth Advisory Solutions (CGWAS) in 2005, said this year's award comes as the firm's "weight of innovation" over the past 15-20 years has been realized. "Our business has really been one of the leaders, in not only technology innovation, but also back office innovation as well as new products innovation," Tracy said.
One component of these advancements has been the integration of the Consulting Group's financial planning and investment advisory business, which occurred in September 2012.
"It has always been my belief that clients are best served in a relationship where you can combine discovery, financial planning, asset allocation, the development of investment solutions, and reporting tied to their goals," said Tracy.
CGWAS's more than 300 employees now focus on ultra-high- and high-net-worth and institutional investor client needs. But full amalgamation is continuing for the 40-year-old division of Morgan Stanley with more than $614.7 billion in assets.
For its Custom Investment Outsourcing business, a re-launch in April 2013 has added about $1.2 billion in assets. While noting that it is a "very fast growing segment," he explained that "there is a strong need for discretionary investment management, with full accountability."
Overall, as the wealth management industry continues to evolve, Tracy said CGWAS will continue to focus on what it does well, and that is to offer advice.
"You have seen a major surge in recognition among investors in that they both want and need advice," Tracy said. "The bottom line is people have access to more advice, people are using advice at a higher rate than they used it in the past."
But will CGWAS nail down any 2014 NOVA awards? Tracy said the weekly "Innovation Lab" meetings will help achieve this goal. The exchange of ideas is helping reach its end solution to create "the industry's first holistic wealth management platform."
"The industry's changed more in the last five years than it has in the 20 years prior," he said. "The pace of change is significant, and it's important when you are serving clients in an industry where things change so quickly that you position yourself to be able to respond to those changes, or to lead those changes."
VISIONARY LEADERSHIP: HONORABLE MENTION
Charles Rizzo: John Hancock Investments
"I had such a great experience this summer and have been raving about it to my friends," begins an e-mail that was received recently by the NOVA Honorable Mention recipient for Visionary Leadership from one of his college interns.
The Summer Internship Program--implemented in 2008 with seven interns and has since grown by 214% to 22 interns--is just one of the innovations that Charles Rizzo, chief financial officer has introduced to John Hancock Investments.
Rizzo was first brought on board to modernize the fund administration team so it could support the firm's growth. "My vision when I started in June 2007 was to have a state-of-the-art fund administration platform," he notes. After two months he had systems and processes in place and a team compiled.
Team innovations didn't stop there, however. The Employee Rotation Program was created by Rizzo in 2010 to provide career development opportunities for fund administration associates.
"Human resource strategies are your biggest asset," he states. "Protecting the franchise through strong controls and risk practices and having skilled and engaged people are a key component." When it comes to assets, the firm's AUM has grown significantly.
This program allows employees exposure to other areas within fund administration and the mutual fund business, in addition to providing an opportunity to learn new skills and acquire both management and technical expertise. "If people are having fun at work, it makes for good performance. Otherwise it's just a job to them," he adds.
In an effort to minimize JH Investments exposure to risk, Rizzo developed a Vendor Management Department that monitors vendor performance, enhances service levels and facilitates reporting with the aim of improving vendor transparency.
"We need to have good systems and processes that can keep JHInvestments' image from being tarnished by errors or mistakes."
Rizzo created the Innovation Council within the mutual fund business. This team is tasked with increasing efficiencies, decreasing expensesand developing innovative ideas that generate value.
A recent contest had the mutual funds team presenting ideas on providing better customer service. "Some tremendous ideas came from the team and we're implementing some of them now."
Not one to rest on his laurels, in June of this year Rizzo graduated from the MIT Sloan School of Management. He earned an MBA, which will help modernize his management skills.
"I want to know everyone's first name. That's the culture I want," he said. "I want people to look at Hancock/Fund Administration as a destination."
CREATIVITY IN MARKETING OPERATIONS: WINNER
Putnam Investments: Advisor Tech Tips
The success of Putnam Investments' Advisor Tech Tips, a free information hub that has revolutionized how financial advisors sift through articles, presentations and infographics, is being recognized with the top spot for Creativity in Marketing Operations in this year's NOVA Awards.
Mark McKenna, head of marketing at the Boston-based firm, said that enhancements over its first year of existence, such as tailoring the Web portal more to busy financial advisors with more quick hitting informational items, has led to its recent win in the 11th Annual NOVA Awards.
Advisor Tech Tips (advisortechtips.com), a service offered by the firm with more than $137 billion in assets under management, is coined as a "value-add" initiative because it can serve as an information aggregator and also build relationships for the investment advisor.
Whether through its more than 2,100 members on LinkedIn or 30,000 engagements on Twitter, Advisor Tech Tips uses the power of the Internet and social media to build up its reach and disseminate educational content for financial advisors and clients.
"It's a free service, it's value add, it's a library of information, graphics, videos, articles, several thousand LinkedIn group members, that allows for communication of ideas," McKenna said. In May, the investment company launched a media campaign, which catapulted traffic to its high of 7,697 visits, where more than 2,600 of those visits came from social media sources such as Twitter.
Since its inception, the added value is seen in the over 30,000 engagements in clicks and retweets from Twitter.
"We think it can be a great platform to augment with some video capabilities to help educate people," he said. "All of us are consuming a lot more information in highly edited video, and people's appetite is increasing because bandwidth is better."
Over its one-year infancy, Advisor Tech Tips has proved to be a great investment given the minimal allocation of resources and added costs that could have been associated with such an undertaking. Putnam highlighted that existing personnel and capabilities, such as its in-house broadcast studio, have helped to establish the outlet as a premier information source.
For the future, McKenna said that Putnam will continue to look at analytics as marketing campaigns evolve.
"But like many successful marketers we are rolling up our sleeves and diving in and experimenting with these properties," McKenna explained, while noting that mobile will continue to revolutionize capabilities in the financial investment industry.
CREATIVITY IN MARKETING OPERATIONS: HONORABLE MENTION
IndexIQ: Gregory Bassuk
IndexIQ's tagline, "Positioning Ourselves As Being the Alternative to Alternatives," says it all.
And it is this way of thinking that led to the firm and its Chief Operating Officer, Gregory Bassuk, receiving the NOVA Honorable Mention for Creativity in Marketing Operations.
IndexIQ, under Bassuk, is the leading developer and marketer of index-based alternative investment products. The company was the first to launch a suite of liquid alternative ETFs, mutual fund and separate accounts and continues to lead the category.
"Innovation and execution are why we've been successful and it helps distinguish us from other companies," said Bassuk, who is also one of the firm's founders.
IndexIQ has a three-pronged philosophy: 1) Rolling out strategies that provide the benefits but not the structural limitations of alternatives; 2) "Democratize alternatives" through cutting edge creativity in marketing initiatives and operations so all investors can access; and 3) Being focused on education.
IndexIQ has launched various marketing campaigns since the firm was founded in 2006.
"There's marketing strategy in everything we do," said Bassuk, adding that marketing has two main elements that go into each campaign-education and multi-channel.
Each campaign has a digital, print collateral, video, website, e-mail and webinar element. "Our target audience is reachable by all these channels," Bassuk notes.
Alternative to Alternatives is designed to educate investors on effective ways to incorporate liquid alternative investments.
IQ Anywhere targets investors' smart phones and electronic devices with educational messaging relating to the availability of new investments. "These are the days that liquidity and transparency are critical for investors." states Bassuk. "We look to distribute our educational materials to investors right when they're at an event," he notes.
The IQ Inform campaign targets the fast growing group that still want their information but their schedules are demanding and they are seeking to get it through webinars and e-mails.
"This segment is running at a thousand miles an hour so they are looking to participate in webinars to stay ahead of the competition," said Bassuk.
He points out that these campaigns are beneficial to everyone-from those who attend conferences to those who communicate solely by e-mail and web properties.
"We're excited about the changes we're making," said Bassuk. "The next few years will bode well for us."
INNOVATIONS IN CUSTOMER EXPERIENCE: WINNER
Putnam Investments: FundVisualizer
FundVisualizer is a Putnam Investments' analytical tool that was borne out of a need to help the financial assistance practice with client demands. FundVisualizer, which can serve as a financial advisor's sidekick by generating needed portfolio modeling and comparison charts in real time, has given Putnam the win for Innovations in Customer Experience.
The FundVisualizer, which has been modeled as an open-architecture instrument, has also been a boon for its financial advisors. According to Putnam Head of Marketing Mark McKenna, the seamless integration of "mobile to the desktop" was a major influencer in FundVisualizer's recognition as a premier industry analytical tool.
"Also driving it is the tremendous use of mobile across the financial community and mobile salespeople," McKenna said. "A number of advisors have said to me: 'my iPad is my electronic briefcase and I use it constantly with my clients on the go to view data' and that's made it hugely popular."
McKenna adds that "shareholder output," which allows advisors to customize solutions and communicate to clients, is a new successful innovation. The FundVisualizer allows users to compare and analyze client portfolios. This information is then shared "turnkey fashion." "You can store, save it, e-mail it," McKenna explained.
Ease of use, coupled with mobile investments, has helped the 75-year-old money manager for both individual and institutional investors to allow for further dissemination of educational materials. McKenna explained that Putnam plans to explore more information options as it looks to help advisors maintain their current clients and gain new ones.
"We will look to provide even more education, perhaps an element and a link that allows someone to understand concepts such as information ratio, alpha, and beta," McKenna said.
According to the firm's Marketing Head, the financial services firm will continue to focus on analytics and future goals.
"Mobile has taken the industry by storm and that's a huge driver of our experience," McKenna explained. "We're really trying to connect people with relevant content to answer their questions. And that's it really in a nutshell of what we're trying to do; we're not really trying to sell anything, we're really trying to connect people to content that helps them answer questions."
The application is available in the App Store for iPad, and Google Play Store for Android-based tablets. For desktop users, the application can be accessed when visiting https://www.putnam.com/fundvisualizer/.
INNOVATIONS IN CUSTOMER EXPERIENCE: HONORABLE MENTION
Janus Capital Group: Team CVS
Janus Capital Group's Honorable Mention for Innovations in Customer Experience NOVA Award was literally a team effort--Team CVS, that is.
Over the past couple of years, Janus had engaged all areas of its organization and discovered that a large number of employees didn't have an understanding as to the impact of what they did and how it affected the firm's clients. It was determined that a change had to be made as Janus' success was dependent on a favorable experience by its clients.
"In 2011 teams in the Janus Mastering Business Acumen program were tasked with developing initiatives that would help the firm further its mission of enhancing the level of service provided to its clients," said Craig Brown, Co-head of Equity Trading and VP of Investment Operations. The Operating Committee selected several of the JMBA initiatives, which in turn were presented to the Executive Committee. A few select JMBA ideas were chosen to be rolled out to the organization. CVS was among them.
"The Client Value Statement is an actionable statement each employee creates, owns and lives by that demonstrates where they fit into the journey our clients have with Janus and how they impact the client experience," states Brown.
In addition to Brown, members of the CVS team instrumental in its development include John Urosevich, VP, Business Intelligence & Reporting and Ginger Fanning, Senior Director with the Advisor Relationship Management team.
According to Brown, a successful CVS program is one where: 1) Every employee completes the exercise of developing their CVS and entering it into People Finder (the firm's digital employee search platform); 2) Employees begin to automatically think about their CVS as they approach their jobs and then change their behavior accordingly to ensure they are "living" their CVS; and 3) The CVS becomes woven into the Janus culture, so it is no longer considered an initiative, but is simply "the way we do business."
The positive response from Janus employees to the CVS was even greater after they received training, which presented them with brand strategy and information so they better understood how their actions impacted the end clients. HR and Marketing developed a training program that would holistically approach how Janus can become more client-centric through the work of individual employees.
In 2011, prior to the development of CVS, 76% of employees understood the connection between client satisfaction and how well they performed their jobs. Fast forward to 2012 and that figure jumped to 91%. Go team CVS.
BACK OFFICE EFFICIENCIES: WINNER
OppenheimerFunds: Intermediary Operations Group
Superstorm Sandy, which shutdown Wall Street for two days last fall, was an opportunity for the Intermediary Operations Group at OppenheimerFunds to shine.
OppenheimerFunds' systems were able to handle transfers when the market was closed, through technology efficiency, one of the few among fund families that were capable of doing this. The firm found that it was able to process these fund transfers at night without worry.
Stacy Roode, Senior Vice President, Transfer Agency, said this competency "allowed broker-dealers to reconcile the trade when the market opened with new pricing, and this prevented substantial manual work on their side, because the trades weren't rejected.
"The unexpected market closure was really unprecedented in this scenario," Roode said. "As a result all firms, mutual funds and broker-dealers were scrambling to handle these dynamics."
Because of this efficiency, coupled with a unique organization structure that affords intimate successful client relationships and omnibus recordkeeping, an industry best practice towards more accountability, OppenheimerFunds has been proclaimed the winner of the NOVA Award for Back Office Efficiencies.
According to Roode, it has been OppenheimerFunds knack to be at the forefront of omnibus oversight and governance. Heralded as an initiative that supports "transparency and accountability," she explained that the firm has been a "very active and influential player to shape the evolution" of the omnibus model, which helps with solicitation of Financial Intermediary Controls and Compliance Assessment.
"This shift to omnibus accounting has occurred and has become so prevalent," Roode states. "I think boards are really interested in the accountability of the firms that are doing record keeping and FICCA is one avenue by which they're provided comfort and assurance; they're able to be reassured that the firms are accountable for their record keeping responsibilities."
"As part of our firm intimacy piece, how we partner with these firms is really understanding them and understanding their operations," Roode said. "All these firms have different approaches as to how they do record keeping, firms have different technologies that allow for different capabilities."
Customizing these resources has also led to change in resource distribution. Roode noted that clients in the DCIO, institutional and variable annuity space afford a more hands on approach.
"Over the past two years, creating this firm intimacy with specific businesses...has grown as those businesses have grown for us," she stated.
BACK OFFICE EFFICIENCIES: HONARABLE MENTION
SEI Investments Company: Manager Services Team
The development of an ETF order-taking platform designed to create increased levels of efficiency and transparency has garnered SEI Investments Company's Manager Services Division a NOVA Honorable Mention in Back Office Efficiencies. SEI's annual revenue for 2012 was $992.5 million.
The motivation behind this innovation was "first and foremost, ease of use for clients," said John Alshefski, Senior Vice President and Managing Director of the Investment Manager Services division.
Authorized participants (APs) place orders online rather than calling them in. This allows them to enter trades and receive affirmations faster, review and modify trades with increased ease and flexibility, and reduce potential errors because of the automatic controls and verifications that encompass fund parameters and sponsor's trading rules.
"Because it's all online, ETF sponsors can get a real time update of what is happening with their funds throughout the day," said Alshefski.
The platform connects APs, fund sponsors, custodians, transfer agents and fund admins in one process. Any Authorized Participant is only a few clicks away to participate into a fund and can quickly and easily get a listing of funds that they are authorized to trade into.
"We wanted to make transactions for Authorized Participants as seamless as possible," said Alshefski. "By reducing the number of moving parts and streamlining the process, this also becomes a risk mitigating process from an operational perspective," he added.
Additional controls and features include: triggers based on the size of the order and the fund symbol; verifications of orders; and instantaneous e-mail confirmations. All these features work toward the prevention of erroneous trades.
"Throughout the web entry there are multiple checks and balances, said Alshefski. "If you have restricted security, for example, that will automatically show as a flag or prompt for the user." Another benefit of the electronic system is the increased transparency to sponsors. Rather than waiting until the end of the trading day to view their market positions, sponsors can now log in periodically to obtain a more accurate snapshot of their activity.
"Straight-through processing reduces the inefficiencies and potential for error in manual input," Alshefski said. "It takes the 'swivel chair' nature of these processes out of the equation. There's real time data and transparency at a fund-by-fund level. And it adds speed to the transaction process and the ability to reference historical records quickly."