FDx Advisors Blog

Highlights from the 2013 FolioDynamix Client Conference & Money Manager Forum

December 4, 2013 Written by Sarah Abernathy

As we wind down the year, it seems like an appropriate time to share some of the useful insights we gained during the 2013 FolioDynamix Client Conference and Money Manager Forum. We were thrilled to have so many of our clients and industry-leading money managers join us at this year’s Conference, as we set a new record for overall attendance. For those of you who were unable to attend, here are a few highlights…

Keynote Speakers

After a little bit of fun (golf, spa, salsa making and cocktails), the conference began in earnest when our first keynote speaker, Robert Johnson, Director of Economic Analysis for Morningstar, kicked things off with his outlook on the U.S. economy. Like many economists in the current environment, Mr. Johnson does not expect any huge change in the current state. His outlook is for yet “another year of slow but steady growth,” evidenced in his estimates of real GDP growth of 2.0% to 2.25%, inflation steady under 2% and a decline in the unemployment rate to between 7.0% and 7.3%. His presentation touched upon developments in many key drivers of economic growth. He noted many positive trends, including increasing private sector employment, stable inflation for now, and increasing consumer spending, contrasted with numerous negative factors, such as uncertainty around Fed policy and volatility in GDP that may deter further business spending.

Our second keynote speaker, Robert Moore, President of LPL Financial, and FolioDynamix CEO Joseph Mrak, were also on hand to discuss trends in the wealth management industry. Both touched on the increased usage of rep-as-PM and rep-directed models in the industry, as well as the consolidation of the marketplace.

Money Manager Sessions

As in the past, FDx Advisors was excited to include a variety of our asset managers at this year’s conference. From SMID to large, REITs to bonds, and a new Strategist, these managers did a wonderful job describing not only their process and philosophy, but also offering their opinion on broader economic or industry-related topics posed by the audience. We also introduced the “Manager Round Robin,” which was exceedingly well-received by its participants and opened up the conference to allow for a broader range of asset managers to interact with our clients.

FDx Advisors Sessions

Shari Hensrud-Ellingson, Chief Investment Officer at FDx Advisors, discussed Overlay Management Best Practices, defining overlay management in part as “a style that coordinates and implements multiple disciplines from investment managers,” and the nuances involved in its successful execution. She noted that “a lot of drift does not necessarily equate to a lot of risk,” and that the risk of this drift is related to each manager’s alpha. This discussion on managing Alpha Drag is a paramount concern in an industry increasingly embracing the UMA concept.

David Chandler, CFA, Director of Research and Trading at FDx Advisors, touched on an always-hot topic: “The Time and Place for Alternatives.” He suggested that alternative strategies, such as long/short, merger arbitrage and fixed income arbitrage, should not be added to portfolios with the expectation of increased return, but instead with the expectation of further diversification benefits.

I gave a presentation on the activities in the Investment Research Group over the last year, including asset trends on our platform and an update on our Platform Scorecard. In response to a previous client inquiry on our expectations for stock performance in a rising rate environment, I also discussed the concept of Equity Duration, and its application in setting expectations for equities when rates eventually rise.

FolioDynamix Wealth Management Technology Showcase

We were very excited to debut Version 7.0 of the FolioDynamix wealth management technology platform (FDx SingleSight). This technology team also hosted panel discussions on various topics, including open architecture implementation in the bank trust channel and an interactive FolioDynamix technology user group.

The FolioDynamix 2013 Client Conference and Manager Forum proved to be an engaging and insightful event and we have already begun planning (and honing our salsa-making skills) for the 2014 FolioDynamix Conference – so keep your eyes open for a save the date coming your way in the New Year!


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