Hollie Fagan, Head of RIA & Retail Investor Platforms at BlackRock speaks with Julie Cooling, Founder and CEO, RIA Channel about the changing investment landscape and helping advisors to build better client portfolios. As fiduciaries, RIAs have a duty to put their client interests above their own. That means not only creating an investment policy statement, but adhering to it without conflicts of interest by means of selling proprietary or high-fee investment products. Passive ETFs offer transparency, liquidity and typically, lower fees than actively managed mutual funds. Hagan explains how her group at BlackRock works to help advisors construct portfolios using ETFs for core market exposure, and active, alpha generating funds as satellite holdings that may reduce volatility and assist with outperformance. IVV, the iShares Core S&P 500 ETF is the second largest ETF in the world, and is an example of such a core component.
Her team provides services to help RIAs further develop their businesses, and emphasizes the importance of advisor differentiation. Hagan points out that if the DOL (Department of Labor) Rule is enforced, it will increase the number of advisor fiduciaries. So being a fiduciary will simply not be enough to attract and retain clients. RIAs will need to innovate their practices by offering more services, especially in the area of retirement planning. BlackRock’s value-added services for the RIA community assist them in areas such as technology, risk management, portfolio construction, and business building.