CEO, Allianz Global Investors Distributors; New York City
What he’s about: “I have a passion for seeing people who have been working their tails off all their lives have a fair opportunity to retire with dignity.”
Brian Gaffney helped build the 401(k) industry. Now he’s out to fix what’s wrong with it.”The idea that 401(k)s would cause the erosion of the defined benefit plan was no one’s intention. The twilighting of [pension] plans is very disheartening. The 401(k) was supposed to be a supplemental, improved employee benefit plan on top of a defined benefit plan. Now with the shift to defined contribution plans, people will no longer be getting guaranteed income. They have to fend for themselves and make decisions about how to finance their retirement,” says New York City-based Gaffney, a managing director and CEO of Allianz Global Investors Distributors, the retail distributor for PIMCO, NFJ Investment Group and Nicholas-Applegate Capital Management, among others.
At AGID’s helm, Gaffney, 56, is responsible for driving growth for all its asset management entities. Indeed, he has been quite successful at it. For the last two years, the subsidiary of Allianz Global Investors, one of the world’s top five asset management companies, with more than $1.7 trillion under management, has ranked first with increased market share and is on track for a third No. 1 year.
Notes Dr. Joachim Faber, CEO of Allianz Global Investors: “Under Brian’s leadership, we’ve produced record sales in U.S. mutual funds at a time when there was tremendous distrust in our industry and unprecedented market volatility.”
A social worker during college, Gaffney is passionate about preventing what he calls a “retirement crisis.” To that end, last June Allianz launched the Allianz Global Investors Center for Behavioral Finance, stemming from Gaffney’s substantial interest in the behavioral aspect of retirement decision-making.
The Behavioral Center, a value-added for Allianz broker-dealer clients, is designed as a place where financial advisors can participate in training sessions and from which research and retirement solutions will emerge. “We hope to have some real thought leadership around how behavioral finance relates to retirement,” Gaffney says.
The Center grew out of an eye-opening report — compiled for Allianz by UCLA professor Shlomo Benartzi, prominent expert in behavioral finance and now the Center’s chief behavioral economist — packed with insight from 10 different academics’ research into retirement decision-making.
The professors show, for example, that people are five times more risk-averse as soon as they enter retirement; also, dementia begins earlier than most assume.
“Yet, in many cases,” notes Gaffney, “we’re forcing people to make decisions about things like annuitization when they’re much less equipped mentally to make them. We need to design solutions that can be made earlier in the life cycle.”
Gaffney has been observing the retirement dynamic for nearly 30 years now. Formerly a small-business owner, in 1983 he established a 401(k) plan for his 35 employees.