With sights clearly set on Fidelity, Putnam’s CEO Bob Reynolds has put together a firm that has at least a chance to challenge the top retirement provider. As outlined in a recent Bloomberg BusinessWeek article, Reynolds sees the opportunity to build a market leader. That, of course, is what Reynolds built at Fidelity when he led their retirement business — nearly ascending to the top job there before leaving in 2007.
Even with $387 billion from the acquisition of JP Morgan’s large market record keeping business, which will merge with Putnam and Great-West, Reynolds’ combined business is still far behind the $1.37 trillion of retirement assets that Fidelity manages.
Noting that Reynolds is very competitive, one industry expert describes his experience as both “brilliant and searing” — proven in part by his turnaround of Putnam, which hemorrhaged $44 billion between 2006 and 2008 but enjoyed a net inflow of $3.8 billion last year. The newly formed retirement business now has scale and serves all markets, which at least puts it in a position to aspire to be the top retirement provider. A Fidelity executive noted that combing two cultures is hard and takes time; adding a third can be even trickier.
In an interview with NAPA Net the Magazine, Reynolds said that the key to the future — and to innovation — is to use technology to keep getting more personal and relevant to each individual participant. This might include customized TDFs — not for the plan but for each individual. He also noted that for advisors that specialize in retirement, using annuities for retirement income and leveraging relationships with wealth management clients will also be important. That’s a big shift from the perspective Reynolds had when he built a primarily direct sold business at Fidelity.
