The future of managed investments

Jun 9, 2014 @ 12:00 am

Runtime: 2:17

John Brett, Pershing's managing director, outlines why managed investments have become more prominent among advisers, and predicts their next area of expansion.

Video Transcript

Advisers are starting to use managed investments more than ever, primarily because the equity market. The reality is that an individual adviser, trying to be able to compete with institutional quality management, has become problematic. And so by utilizing and outsourcing those skills to a portfolio manager, managed investment has become a solution. What's also changed is the size of the account necessary to establish one. We been able here within Pershing to establish an account minimums as small as $10,000, to be able to give a managed investment solution to everyone here in the United States. By way of background I started the industry in December of 1980. In those days, managed investments was a new product. And in those days, the premise behind it was offer institutional quality. Those institutions had as there minimum, 10, $20 million. What has changed over those 34 years, the account minimums have gone down. And all the way down now to this $10,000 minimum. The key elements obviously is technology, has been a great leverage tool that allows a portfolio managers to be able to give to us purging. And they manage investment space. Their portfolio, the strategies themselves. So effectively, we've been able to leverage technology, as well as the advisers and be able to give a more consistent investment experience to their retail clients. Adviser using manage investments is a part of the overall portfolio management, not exclusively. And by you leveraging products like ETFs, managed investments, and individual securities, whether they be fixed income or debt, have been able to make a real inroad to how portfolios are managed. Clearly, what's part of our future, I believe, is gold based investing. By utilizing managed investments, individual advisers can choose to use aggressive portfolios or less aggressive. Depending on individual client needs, because their goals will be different. One of the exciting for our industry I believe is this idea of democratization of managed investments. The premise behind it is that even a smaller account of $10 thousand is now able to get work class portfolio management styles in their portfolios. Being a [INAUDIBLE] very different experience than just ten years ago. Also, obviously, the leverage use of ETFs, more and more advisers feel more comfortable using ETFs in their portfolios, and by so doing, getting more exposure on a global basis to international investing. [MUSIC]


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