Deals and People November 13, 2015

Retirement Industry People Moves

TD Ameritrade’s CEO to retire; a strategic alliance for PEI and Proteus; new hires at Delaware Investments.
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Fred Tomczyk, president and chief executive officer of TD Ameritrade, said he will retire next September at the end of the firm’s fiscal year.

Tomczyk started his career with TD Ameritrade as a member of the board of directors following the company’s acquisition of TD Waterhouse USA in 2006. He joined the company as chief operating officer in 2007 and became chief executive in 2008. His decision to retire will bring to a close a noteworthy chapter at the firm. Taking the helm on the eve of the financial crisis, Tomczyk’s legacy includes growth in total client assets from $278 billion in 2008 to nearly $700 billion today and consistent best-in-class employee engagement rates of more than 85%.

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The board has named Tim Hockey, group head of Canadian banking and wealth management at TD Bank Group, currently president and chief executive officer of TD Canada Trust, as president of TD Ameritrade. His appointment becomes effective in January; he will also join the board of directors.

He will succeed Tomczyk as CEO in September, after Tomczyk retires.

As president of TD Ameritrade, Hockey will initially be responsible for the company’s core client channels: retail, institutional and trading, assuming responsibilities for technology, operations and other corporate functions (finance, human resources, legal and risk) in the coming months.

Hockey holds a master’s degree in business administration from the University of Western Ontario and sits on the Advisory Board of the Richard Ivey School of Business. He is an executive member of the Canadian Bankers Association and previously served as chairman.

NEXT: Portfolio Evaluations Inc. enters a strategic alliance with Proteus

Portfolio Evaluations Inc. (PEI) has entered into a strategic alliance with Proteus, an institutional investment consulting firm in Canada.

PEI will ensure Proteus’ Canadian clients that have U.S. operations receive complete fiduciary protection, guidance for Employee Retirement Income Security Act (ERISA) concerns and investment advice. Proteus will provide PEI’s U.S.-based clients that have Canadian operations similar consulting expertise. The two organizations will leverage the skills in their markets to deliver a more complete client experience and increase the scope of deliverables.

PEI, based in Warren, New Jersey, is a privately held consulting firm providing institutional investment and retirement plan consulting services.

Based in Toronto, Proteus provides pension plan governance and investment consulting services to corporate plan sponsors, not-for-profit organizations, trusteed plans, public plans, foundations and endowments.

NEXT: Delaware Investments adds industry veterans in marketing and asset liability

Neil Siegel has joined Delaware Investments as chief marketing and product officer, a newly created position. Siegel provides strategic oversight of the firm’s marketing, product management and development, and platform sales, including the defined contribution investment-only (DCIO) channel. He reports to Shawn Lytle, president of Delaware Investments.

Siegel, who has more than 22 years of experience in financial services, was previously at Neuberger Berman as partner and managing director, chief marketing officer. Before Neuberger Berman, Siegel held various leadership positions at Morgan Stanley, including head of institutional and intermediary marketing for Morgan Stanley Investment Management.

Lytle cites Siegel for his successful execution of global marketing programs and substantial experience in developing relevant products.

Christopher Hanlon has joined Delaware Investments as senior vice president of insurance strategy and asset liability management. He brings substantial insurance industry expertise and reports to Roger Early, head of fixed income for Delaware Investments. Previously, Hanlon was chief risk officer and enterprise head of credit risk management and control at The Hartford Investment Management Company, where over 26 years he held various leadership positions in asset liability management, defined contribution, mutual fund, and general account portfolio management.

Eric Kleppe has joined Delaware Investments as senior vice president of institutional client services, a new role. He is responsible for relationship management and client servicing for institutional accounts and reports to John Finnegan, head of institutional client services. Kleppe, who has 24 years of experience in client service as well as equity research, was previously head of relationship management and operations at Diamond Hill Capital Management. Previous roles include managing director of the institutional client relationship team at Turner Investment Partners, manager of sub-adviser search at The Vanguard Group and equity analyst at Wellington Management Company.

Data and Research November 13, 2015

Millennials Aren’t Scared of Investing

A new ICI study finds nearly one in three Millennial households owns mutual funds.
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New research released by the Investment Company Institute (ICI) finds almost one-third of Millennial households owned mutual funds as of mid-2015.

Not a big surprise, more Baby Boomer and Generation X households—with family members being older and more likely in their peak earning and saving years—owned mutual funds in mid-2015, at about 50% for each generation. However, while the share of Millennial households that own funds is smaller than that of older generations, these Millennials started investing at a younger age than previous generations, ICI says.

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The median age at which adult Millennials—born between 1981 and 1997—first purchased mutual funds was 23, ICI finds, while the median age for first mutual fund purchase for households headed by a member of Gen X—born between 1965 and 1980—was 26. Among Baby Boomers—born between 1946 and 1964—the median first-purchase age was well into their 30s.

ICI finds that households headed by members of the Baby Boomer generation still represent the largest share of mutual fund owners, at 40% of all current mutual fund-owning households. The next-largest shareholder group is Gen X households, which represent 32% of mutual fund-owning households, followed by adult Millennial households, which make up 16%. ICI finds the two older generations, often called the Silent and GI Generations, constitute the remaining 12%.

Baby Boomers also appear to have more of their wealth tied to mutual funds than other generations, according to the ICI analysis. In fact Boomers in general held 53% of their total wealth in mutual funds as of mid-2015. This compares with 27% of household wealth tied to mutual funds for Generation X. Millennials, because they are younger and have had less time to accumulate savings, hold only 5% of all household assets in mutual funds.

NEXT: Time to target Millennials 

“Though the Baby Boom Generation is frequently highlighted for its significant role in mutual fund investing, this study shows that Millennials are also focused on saving and investing,” says Sarah Holden, ICI senior director of retirement and investor research. “Our 2015 household survey finds not only that Millennials are buying mutual funds at a younger age than any other generation, but also that nearly one-third of the 26.4 million households headed by Millennials owned mutual funds—showing that this generation is investing for the future.”

Other key survey findings show employer-sponsored retirement plans “increasingly are the gateway to mutual fund ownership” among all generations. In fact, 67% of mutual fund-owning households that purchased their first mutual fund in 2010 or later purchased that fund through an employer-sponsored retirement plan, ICI says, compared with 57% of those that made their first purchase before 1990.

At the same time, ICI finds almost all mutual fund investors were focused on retirement saving. Fully 91% of mutual fund-owning households listed saving for retirement as a financial goal, with almost three-quarters indicating it was the household’s primary financial goal. 

Interestingly, most U.S. mutual fund shareholders had moderate household incomes and were in their peak earning and saving years, highlighting the importance of the mutual fund industry for middle class savers. As the ICI explains, half of U.S. households owning mutual funds had incomes between $25,000 and $99,999, and nearly two-thirds were headed by individuals between the ages of 35 and 64.

These findings are drawn from two recent ICI studies: “Ownership of Mutual Funds, Shareholder Sentiment, and Use of the Internet, 2015” and “Characteristics of Mutual Fund Investors, 2015.” More information is at www.ici.org. 

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