Morningstar, Day One: giants argue in favor of the fleas

David_Snowball

Susan Byrne and Brian Rogers made an interesting observation about how the industry has changed in their 25+ years of managing. Byrne notes that, as a young manager, is that drilled into her head that "this is not our money." It was money held in trust, "there are people who trust you (the manager) individually to take care for them." That's a tremendously important value to her but, she believes, many younger professionals don't hear the lesson.

Brian Rogers, CIO of T Rowe Price made a similar, differently nuanced point: "when we were hired, it was by far smaller firms with a sense of fiduciary obligation, not a publicly-traded company with an obligation to shareholders. Back then we learned this order of priorities: (1) your investors first, (2) your employees and then (3) your shareholders." In an age of large, publicly-traded firms, "new folks haven't learned that as deeply."

As I talk with managers of small funds, I often get a clear sense of personal connection with their shareholders and a deep concern for doing right by them. In a large, revenue-driven firm, that focus might be lost.

For what it's worth,

David

BobC

David, this is just so very important. We tell our clients, ALL the time, "This is YOUR money, NOT ours." And one of our most important corporate culture adages is that if we take care of our clients, and put them first in every instance, our own company will be very successful. I agree that virtually all the big wire houses and most independent BDs have either forgotten that rule, or use it only in their advertising. The same is true for most large fund companies. I do think Price funds has hung its hat on that adage, and bravo to them.