Wells Fargo, Nationwide, Wilshire seek to expand asset class offerings

Fund firms also trying to help investors manage their emotional response to the current volatility.
MAY 16, 2010
Wells Fargo & Co., Nationwide Financial Services and Wilshire Associates Inc. are all looking to expand their asset class offerings in the wake of the market volatility of the past couple of years, officials of the companies told attendees of J.P. Morgan Asset Management’s 2010 Research Summit on Tuesday. Wells Fargo’s wealth management group is developing retirement income products for its clients, Greg T. Maddox, director of the manager research group, said during a panel discussion at the conference in New York. In an interview, Mr. Maddox said Wells Fargo wants to add three strategies for its wealth-management and private-banking clients: an asset allocation equity income strategy, a hedged product that uses an overlay to manage risk and a guaranteed-income product. The third product would address the concerns that many industry experts have about guaranteed-income products by featuring lower fees and counterparty risk, he said. Nationwide is also looking at adding alternative asset classes, said Lynette Berger, chief investment officer for Nationwide Financial Services. “The challenge for us is figuring out what we need to do to make it implementable at the retail investor level,” she said during the discussion. “In addition, we service a portion of the variable annuity business, so whatever we bring in needs to be able to be insured.” Wilshire is also looking to add alternative-investment offerings that have the same kind of transparency as Investment Company Act of 1940 funds, said Victor Zhang, managing director and head of investments. A lot of the challenges fund firms face is helping investors manage their emotional response to the current volatility, panelists said. “We are working a lot on client education,” Mr. Maddox said. “At the end of the day, you can do all of the right things, but if clients can’t hang in there, it doesn’t work.” More and more, firms are finding themselves managing investor expectations and concerns, panelists said. “We are in the behavior modification business,” said Don Phillips, managing director for corporate strategy, research and communications at Morningstar Inc., who moderated the panel.

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