Future Proof’s first venture to the Atlantic coast came in Miami Beach, Florida, from March 16 to 19. Future Proof Citywide brought together many of the elements and atmosphere from the previous three Future Proof Festival conferences in Huntington Beach, California. WSR covered the event on location.
Onstage Monday, March 17, in a panel titled “Driving Product Innovation Through Collaboration,” Vildana Hajric, a Reporter for Bloomberg News, interviewed Bryon Lake, Chief Transformation Officer, Asset & Wealth Management at Goldman Sachs Asset Management; Jose Minaya, Global Head of Investments and Wealth at BNY; and Mark Alberici, Head of Product Innovation & Third Party Relationships for State Street Global Advisors.
Minaya pointed to the urgency of the need to collaborate: “In times past, collaboration made sense. Today, it’s a necessity,” he said, painting a scenario to demonstrate how difficult it is even for the largest of organizations to innovate alone: “You can spend billions to develop it and it takes ten to fifteen years, you can spend billions on an acquisition, or you can find your lane and bring value.”
Minaya noted that what clients required in the past is now “table stakes,” and modern clients ask for scale and ease of use, which requires partnered innovation to produce.
Lake gave three questions that innovators must ask before embarking on a project: “What are you solving for the client? What are you good at? Can you do it in a thoughtful and compelling way?”
In response to Hajric, Lake said that the “hot products” today are direct indexing, active ETFs and alternatives.
Alberici had a different variation on the three fundamental questions to ask before embarking on innovation: “What does the client need? What does the exposure you are giving the client through the innovation solve? What is the right wrapper?”
When Hajric asked how to know if a firm has found the right partner, Alberici pointed to the brand of the partner, “because the brand is earned.”
Minaya added that partnerships that look great on paper may find trouble working out culturally. He said he used his “gut” to discern, and also looked to ask the counterintuitive question: “Why shouldn’t we do this?” The difficult conversation, Minaya said, can help you discern if you’re heading into a partnership that will be difficult going forward, or help you realize that there’s a better partner available.
Commodities ETFs
WSR also spoke with USCF Investments’ Chief Marketing Officer, Katie Rooney, about commodities ETF and the conference. Noting that her firm, which provides the United States Oil Fund (USO), had partnered with Future Proof since the start of the Future Proof Festivals, Rooney said “Post-pandemic, it was the different opportunity we all needed. It gave fresh life to conferences and the investments community.”
Rooney pointed out that commodities should be an “approachable” asset class, but in times past it was harder for individuals to make investments. “All of us use commodities, from drinking orange juice in the morning, but we don’t really understand them,” she added. “We make commodities available to all investors, so they don’t need a futures account.”
Rooney said that to be fully diversified, portfolios should have commodities exposure, especially noting that commodities can play unique roles in a portfolio during periods of inflation or uncertainty.
Private Market Interval Funds
We also spoke with Phil Huber, Managing Director, Head of Portfolio Solutions at Cliffwater, a provider of interval private market funds for accredited investors and the mass affluent, which also participated in all previous Future Proof Festivals. Huber said that Citywide was a “go-to conference for advisors, at the forefront of innovation, fintech and investments, where portfolios are changing, especially in private markets.”
Huber said that private markets have seen a rise in popularity as advisors access these for their clients, but some clients find capital calls and K-1 tax forms problematic. He said that his firm responded to those issues with interval funds that trade with a ticker symbol, lower minimums and no capital calls to provide a “pleasant transaction” that reflects the industry trend toward reducing burdens on clients.
Julius Buchanan, Editor in Chief at Wealth Solutions Report, can be reached at julius.buchanan@wealthsolutionsreport.com.
