Investment Management Roundup – Week Ending 4.3.15

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“How Social Media Is Influencing Institutional Investor Investment Decisions”
Pat Allen | Rock The Boat Marketing | | 3.19.15

How Social Media Is Influencing Institutional Investor “In November and December 2014, Greenwich Associates, working with LinkedIn, fielded an online survey of 256 global institutional investors including 100 in North America, 105 in Europe and 51 in the Asia Pacific. The survey targeted decision-makers and influencers of investment decisions at their institution (top three titles: chief investment officer, portfolio manager, investment analyst) who used digital platforms at least once in the past year to learn about financial topics related to their investing role.

“ … Most surprising to Greenwich’s Managing Director Dan Connell and [Legg Mason Director] Ryan was that one-third of investors surveyed said they’d taken information learned via social media to start a discussion with or choose to work with a particular asset management firm. This is the first work to document this, I’m fairly certain, and the research may open many eyes.”

“Investors need to rethink operating model”
Amanda White | | | 3.25.15

Rethink operating model“A neat little story of investment flows, asset allocation changes, and relationship and service demands is emerging from the third annual Quirk Global Fiduciary CIO Survey. If you’re a CIO of an asset owner what that means is more control but also more responsibilities and the demands of more internal resources. For managers it means changing your proposition for a more customised approach.”

“The Folly of Blame: Why Investors Should Care About Their Managers’ Culture”
Hsu; Ware; and Heisinger | The Journal of Portfolio Management | | Spring 2015

Culture of blame “A cross-sectional empirical study of 70 investment organizations conducted from 2010 to 2013 indicates that firms that have a strong culture of blame tend to score poorly on attributes of importance to stakeholders. For example, blame-oriented investment organizations tend to have poor employee engagement, client experience, and operational performance.

“ … Using cross-sectional regressions, they find that variations in blame in firm culture explain variations in key firm outcomes, such as employee loyalty, employee defensiveness, client service, and performance relative to competing organizations.”


“Massachusetts fines Merrill Lynch $2.5 million for rule lapse”
Svea Herbst-Bayliss | Reuters | | 3.23.15

Ed. Note: The regulators are watching, and the cost of bypassing compliance is high.

Cost of bypassing compliance is high“Bank of America’s Merrill Lynch brokerage unit agreed to pay a $2.5 million fine in Massachusetts to settle charges that it failed to follow its own compliance rules, the state’s top securities regulator said on Monday. Secretary of the Commonwealth William Galvin accused Merrill, Lynch, Pierce, Fenner & Smith of failing to supervise employees properly when the company made two presentations in January 2013 to financial advisers and others in Boston before properly vetting the material with its compliance department .

“… We are reiterating to our employees the need to have internal presentations properly approved before their use,” a Bank of America spokesman said, adding that no clients were harmed by the matter.”


“Institutional Investor Expectations, Manager Performance, and Fund Flows”
Jones, H.; Martinez, J.V. | University of Oxford, Saïd School of Business | Social Science Research Network | | 2.19.14

Expectations about the future performance“Using survey data we analyze institutional investors’ expectations about the future performance of fund managers and the impact of those expectations on asset allocation decisions. We find that institutional investors allocate funds mainly on the basis of fund managers’ past performance and of investment consultants’ recommendations, but not because they extrapolate their expectations from these. This suggests that institutional investors base their investment decisions on the most defensible variables at their disposal, and supports the existence of agency considerations in their decision-making.”


“Best Financial April Fool’s Tweet”

EXCLUSIVE: Simon Cowell’s face to appear on £5 notes…

Cowell’s face to appear on £5 notes

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