Lighting a Path To Advisors' Doors

Robert Methven of GE Asset Management wants to dis

With roots in managing pension funds for General Electric employees, GE Asset Management (GEAM) is branching out into a new arena by providing its investment management services to registered investment advisors. To help spearhead the endeavor, in January GEAM appointed Robert Methven--who served as the money manager's chief financial officer since 1997--to the newly created post of Senior VP of Sales to the RIA Community. Methven concedes that GEAM--which manages $118 billion for individual and institutional investors worldwide and is the investment management unit of Richmond, Virginia-based GE Financial Assurance--is entering a market that's "tough to crack." But Methven is confident that GEAM's separate accounts, mutual funds, and 401(k) plan services, along with the money manager's dedication to "developing a strategy and executing it," will attract planners.

In another move designed to gear its products toward RIAs, GE Financial Assurance recently folded three of its units into one to form a new distribution arm called GE Wealth and Income Management Group. Through the group, RIAs can access variable annuities, immediate annuities, life insurance, and long-term care insurance. Investment Advisor New York Bureau Chief Melanie Waddell spoke with Methven recently from his office in Stamford, Connecticut.

Why is GEAM branching out into the advisor market? We've had a great deal of success within the last two years offering investment management services to institutional clients--pension consultants and pension plan managers. RIAs and independent planners want the same characteristics in a money manager that those on the institutional side do. That very fundamental, research-driven, bottom-up stock-picking that plan sponsors are finding appealing is what we are selling to advisors.

So what are your main duties in your new position? We see [the RIA market] as an important strategic distribution channel for us, and we are doing something very traditional by getting the "voice of the customer," or VOC, which is a significant first step in any new process. I have been meeting with RIAs of all sizes at conferences and at separate meetings. [At a recent conference] an attendee commented, "I thought [GE] only served large corporate plans. I didn't know I could get mutual funds." So we have to build our awareness in this channel. My new role is to complete development of our strategy, to get more information from advisors and tailor products and services just for this market.

How are you going to staff up to best serve advisors? The key part of this is relationship management. And we'll have an assistant manager that is available as a single point of contact for an advisor. We'll also have some people externally that will be able to call on advisors if that's the way they wish to be served. So I'm looking for three external [people] and one internal person. The external people will have the financial advisor experience. I am talking to at least one candidate who has experience dealing with pension consultants. There are strong commonalities between a pension consultant and an investment advisor.

How are your mutual funds faring? We are very happy with where our mutual funds are. In the recent Barron's annual survey of mutual fund families, we were one of only two families to rank in the top ten for one-year and five-year performance. Those that know our funds know the very institutional approach we have, and can see how well our funds fared in the down market last year.

You're also responsible for the wrap program? That will also be one of my responsibilities. Again, that is something where it's very important for us to get the VOC. Right now as primarily a pension manager, our separate account minimum is $25 million or higher depending on the asset class. Now that we are looking to participate in institutional wrap programs, we will look to lower the minimum threshold for separate account investments for the RIA market. We haven't figured out what that level is. We have spoken to a couple of providers that have third-party wrap programs, and we would love to get our products featured in those.

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