Registered Rep.: You joined Janney as head of wealth management in May. Tell me what kind of platform the firm offers advisors?
David Penn: If you're a financial consultant and you do a lot of planning, fee-based business, a good bit of mutual funds and/or insurance and annuities, you're going to do just great at Janney. We pretty much offer everything that the bigger wirehouses offer. If you're a financial consultant who does a lot of alternative investments and structured products, or are into the lending business in a big way, you're probably better off at a wirehouse. I think for 98 percent of the consultants out there, we can do most anything the wirehouse can do, but there are certainly things we can't do.
RR: What do advisors want more of?
DP: I've received some calls regarding managed futures — like, what can we offer there? We've gotten some calls on the alternative side regarding hedge funds — basically non-correlated assets, something that is not just beta. So, one of my initiatives is to start looking at that — managed futures, hedge fund of fund products. I don't think we will ever be a huge player in this area, but we can certainly give our clients an advantage if we pick the right products and services. Another thing I am hearing is, ‘less is more,’ ‘make it simple,’ ‘make it easy,’ reduce bureaucracy,' ‘make it easy to deliver to our clients.’
RR: It seems investors and advisors are re-examining asset allocation models and how asset classes correlate. Do you see a new paradigm for asset allocation?
DP: Even though I have my CFA, I am certainly not an expert on this. My opinion is that historical correlations will return, but we had such a once-in-a-lifetime fiasco last year, of course, people are going to say everything has a correlation of one: bonds go down, stocks go down, foreign markets go down, etc. Again, I am no expert in this but to try to create a whole new model based on what happened over the last 18 months is probably not something we're going to be doing. Janney hasn't looked at the non-correlated asset classes in the past, but we want to help our clients by being able to include those asset classes in our in our asset allocation. We're certainly not going to ignore it.
