In June 2008, Bob Reynolds, the former Fidelity Investments' vice chairman and COO, joined Putnam Investments. As a rising star at Fidelity, his apogee was blunted by the Johnson family's reluctance to give him the top spot, at least if you believed the nattering nabobs at the time.
However, his impact at Putnam was nearly immediate, and the turnaround he's engineered at the storied asset management firm has burnished Reynolds' star to the point where he has become a major spokesman for the investment community, recently weighing in on the national stage on both retirement planning and the federal debt.
For instance, on May 24, Reynolds spoke before the Boston Chamber of Commerce, saying that proposals by Washington deficit hawks to cap or eliminate tax incentives that encourage Americans to save for retirement are "short-sighted" and could contribute to sending millions of workers into retirement with little or no savings.
In March, Reynolds called on Congress to create an optional national insurance charter and a new lifetime income security agency to administer an industry-funded, risk-based national insurance fund to protect current and future retirees, much like the FDIC's bank deposit insurance.
Reynolds' weltanschaung, however, is also, um, worldly. "What happens around the world" affects advisors and clients in the U.S., he said in an interview in AdvisorOne's New York office in late May, noting that half of all U.S. debt is held overseas, much of it in China. Moreover, he points out that a significant part of the companies in the S&P 500 derive their revenue from international operations. Highlights of the interview with Investment Advisor Group Editor-in-Chief Jamie Green follow.
Q. You've made quite an impact at Putnam. What have you accomplished?
A. The past three years have been an interesting time in business and the economy. When I joined Putnam there were internal issues compounded by the markets, but also opportunity. I always loved Putnam's distribution model—90% of our products are advisor sold.
Putnam's ownership also drew me to the firm—Power are long-term investors; they wanted a global asset management business as a growth engine for the company, and they said, "Let's get it right." [Canadian-based Power Corp. is the parent company of Power Financial, which is majority owned by Great-West Lifeco., which acquired Putnam Investments in 2007.]
First, I looked at what was working—made sure we had the right products. Thus the absolute return products, [a strategy] which was used institutionally, but we worked it out in '40 Act funds. Our fixed income offerings were good, but the equity side was not working–some of it was process, some people. So we added seven to eight portfolio managers and 30+ analysts, since not enough was being
