WASHINGTON - "No one can foresee all of the challenges and opportunities that lie ahead," Investment Company Institute President Matthew Fink said at last year's general membership meeting.
He was right.
The overarching theme of the 2002 meeting, "Continuing a Tradition of Integrity in Challenging Times," was similar to that of previous years. Last year's meeting was called "Continuing a Tradition of Integrity: Navigating the Changing Landscape." However, over the past year, with the occurrence of events relating to Sept. 11, the war on terrorism and Enron, the subject matter of the sessions was changed somewhat.
In his opening session, J. Walker Smith, managing partner at Yankelovich Partners of Norwalk, Conn., discussed a lack of investor confidence in U.S. companies, investment firms and the equity markets. Terry Glenn, president of Merrill Lynch Funds and ICI chairman, said the industry suffered an immense loss on Sept. 11 and Fink spoke of the "lessons of Enron."
"Here's what we're faced with," UBS PaineWebber CEO Joseph Grano said at the meeting's keynote session, speaking on what investors see in today's headlines. "You can't trust your priest. You can't trust your accountant. You can't trust your financial adviser."
Adding to the somber tone was an emphasis in several of the sessions on the looming problem of the nation's retirement savings, with several speakers noting that most people are not adequately prepared for retirement because they might outlive their assets. One-third of the U.S. population will be retired in the year 2030, which could pose significant problems for the U.S. economy, noted Jonathan Pond, an investment adviser and financial writer in Watertown, Mass.
Despite the host of events that dampened U.S. markets and the fund business over the past year, the overall tone of the conference attendees was generally optimistic, said Burton Greenwald, a mutual fund consultant based in Philadelphia.
"It was subdued. There was no bubbling enthusiasm," Greenwald said. "On the other hand, I think there was a feeling of confidence and reassurance. The fund business has held up very well.
Although the year's events and their impact were discussed, the focus of the meeting was how fund executives can grow their business going forward, not on what happened in the past, said Erick Kanter, president of Kanter & Associates, a public relations firm in Arlington, Va. Kanter, formerly the head of the ICI's public information marketing department, attended his 18th consecutive ICI annual meeting this year.
"I think there was an acknowledgement of the fact that the business has not been soaring as it was in the recent past, but my sense was that the meeting was oriented towards the business and helping attendees get insights," Kanter said. "I don't think there was a sense of gloom and doom or anything like that."
The fact that the mutual fund industry offers such a wide variety of products helped the business tremendously over the past year and that was one of the key points that came out of the conference, Greenwald said. The shift away from hot technology and pure growth funds was met with a very successful year for value funds. And, for the first time in more than a decade, fixed income and balanced funds experienced a great deal of interest, Greenwald noted.
"The industry's diversification has served it quite well over the last year and I think that message came through at the meeting. I didn't sense any despair," Greenwald said. While several of the presentations took on a serious tone, the subject most frequently discussed in the breakout sessions seemed to be how to build the fund business right now, Kanter said.
"The format and general tone of the presentations was consistent with what it has been in past years," Kanter said. "This year, there was the reality of how the business is doing, which I think is really more flat than down. People are working a lot harder in this tougher environment, but I think that there is more of an optimistic sense, not a pessimistic one."