President & CEO, Putnam Investments
While Massachusetts has long been the mutual fund capital and its birth place, it has also become a leader in managing retirement assets and alternative funds, and in servicing these products.
With over 75 years of experience, Putnam Investments is one of the top money managers for individual and institutional investors. Putnam provides investment services across a range of equity, fixed income, absolute return, and alternative strategies. A global asset manager and retirement plan provider, Putnam distributes its services largely through intermediaries via offices and strategic alliances in North America, Europe, and Asia. Putnam is also a founding member of the Boston Financial Services Leadership Council (BFSLC), organized by Mass Insight Global Partnerships, bringing together senior executives, policymakers, and recognized experts to advance the economic impact of the finance industry in Massachusetts.
We asked Robert Reynolds, BFSLC Co-chair and President and Chief Executive Officer at Putnam his view on trends in the retirement savings landscape, the appeal of doing business in Boston, and how the region is building a pipeline of talent for the financial services sector.
What trends are you seeing in retirement/savings in your business?
We are seeing steady progress towards workplace savings plans that enable secure retirements. We are seeing slow, but steady progress across the country towards workplace savings plan designs that can actually enable people to save enough to secure a reliable income for life once they retire. That means the adoption of fully “automatic” plan designs, in which workers are automatically enrolled, have their savings automatically escalated to levels of 10% or more, and are offered guidance to age-appropriate investments that reduce market risk as a person’s retirement date draws near. Even though workers are free to “opt out” of such plans, experience shows that this type of “automatic” plan design significantly raises participation rates, savings levels, and prospects for successfully funding lifetime income. And that, after all, is the main point of 401(k)’s and other such plans in the first place. We think that plan sponsors, policy-makers and regulators should do everything they can to spur on this very healthy trend — which is already guiding many millions of workers to secure, dignified retirements.
What are the advantages/benefits of operating out of Boston/MA?
Boston is a financial services capital in asset and wealth management. Boston’s status as a financial services capital, particularly in asset and wealth management, provides several advantages. We have great resources available to us through the nearly 170,000 professional services jobs, such as the law firms, public accountants and IT firms that support the financial services sector and allow us to utilize top resources in every facet of our operation. Boston is also home to leaders in a number of different industries including life sciences and technology. As a retirement and savings leader, operating out of Boston allows us to influence and stress, through our relationships with various industry leaders both big and small, the importance of a sound retirement savings strategy.
How does the regional financial services ecosystem affect your talent pipeline?
This city is home to a number of world-class universities offering a continuous flow of great talent. Boston enjoys a series of unique advantages for retirement savings providers. Besides being the birthplace of mutual funds — arguably the most important financial innovation of the 20th century — this city and region host a number of world-class universities — well beyond the most famous ones. These terrific schools offer us a continuous flow of great, well-trained talent from all across America — and the world. Together with Boston’s strong banking, legal, insurance and accounting firms — which also draw on this ever-flowing pool of talent — this “ecosystem” has made Boston the retirement savings capital of America. Indeed, as I often say, retirement savings are to Boston as oil is to Houston — but with a much, much lighter carbon footprint!