Putnam's Bob Reynolds talks with us about Putnam, 401(k)s, and how advisors and their clients can cope with the market.
Bob Reynolds is president and chief executive officer of Putnam Investments, a member of Putnam Investments' executive board of directors, and president of the Putnam Funds. He has more than 30 years of investment and financial services experience.
Prior to joining Putnam Investments in 2008, Reynolds was vice chairman and chief operating officer of Fidelity Investments from 2000 to 2007. During this time, Reynolds served on the board of directors for FMR Corporation, Fidelity Investments Insurance Ltd., Fidelity Investments Canada Ltd., and Fidelity Management Trust Company. He was also a trustee of the Fidelity Family of Funds.
We interviewed Reynolds on June 2; here's a transcript of the interview.
Q: What do you think were the strengths you saw at Putnam that you could
build around when you started there?
A: Number one was that Putnam has a 75-plus-year history, so it has tremendous brand awareness in the marketplace.
It's also a firm that I have known. Having competing against it for two decades, I knew the strengths and weaknesses of their firm. They had an excellent fixed-income team in place, an excellent global-allocation team. The problems, as I saw them, were on the equities side, which I thought were very, very fixable with the right people, the right process, the right compensation structure in place.
And I did love their distribution. It has always been through the advisor channel, which to me is the future of mutual fund distribution, and Putnam's strength has always been distribution, and I would say service along with that. So it was a combination of things that brought me to Putnam.
Q: What are the most significant changes you've made at Putnam, and why did you undertake them?
A: I would put them in two baskets: One, we totally restructured the equity area at Putnam, bringing in new people on the fund management side and rebuilding fundamental research, and we did change compensation; and then, in another bucket, we rolled out 14 new products that played off the strengths of Putnam, and they were based on needs we saw in the marketplace. So I think it was a combination of those two things.
Q: What do you think is right with the U.S. retirement system, and what do you think needs improvement?
A: I think the 401(k)/defined contribution system is the right system for America's workforce because of its portability, self-de-termination, and ability to customize to the individual. I do think the system itself is a great system.