Opening Remarks at the July 16, 2020 Special Meeting of the Asset Management Advisory Committee

I would like to welcome everyone to today’s Special Meeting of the Commission’s Asset Management Advisory Committee.[1]  I am pleased that the Committee is able to meet today to address the important topics on today’s agenda.

Thank you to everyone participating, including Commissioners Peirce and Roisman; our panelists; and the members of the Committee, and a particular thank you to Ed Bernard for your continued leadership of the Committee.  Thank you also to Gilbert Garcia and Neesha Hathi, the Committee members who are serving as today’s panel leaders.  Thank you to the Commission staff who have assisted the Committee in preparing for today’s discussion, especially to Dalia Blass and the other members of the Division of Investment Management, and to Robert Marchman and the team in the Office of Minority and Women Inclusion.  Thanks also to the staff in the Office of Information Technology and the Office of the Secretary for facilitating everyone’s participation in this meeting.  And thank you and welcome especially to all of you who are joining in virtually and listening to our meeting through the Commission’s website.

I am particularly glad that the Committee has been able to schedule this special meeting so that today’s topics can be discussed in more detail than would have been possible at your last meeting, which was focused on the market impacts of COVID-19.  Looking at the impressive list of panelists that the Committee has gathered, I am confident that today’s discussions will help inform the Commission as we look ahead.

I look forward to your discussions on improving diversity and inclusion in the asset management industry, including issues relating to opportunities for diverse asset managers.  As I said at your last meeting, I believe we should continue to ask ourselves how we want participation and representation in our markets to evolve, at all levels.  I am hopeful that today’s panelists will be able to provide useful insights into (1) where we are now, (2) where we need to be, and (3) actions we can take to get there. 

For example, I look forward to hearing more about the role of diverse-owned asset management firms in providing advisory services to investors, and thoughts about how that role might be enhanced through more access and opportunity.  I have heard about the obstacles that some firms have faced in getting mandates.  I hope that this group can have a candid discussion on (1) those obstacles, (2) why firms face them, and (3) how we can work together to surmount them.  And I look forward to hearing about how we can promote diversity and inclusion in the broader asset management industry, particularly in two key areas.  First, how do we improve diversity and inclusion in the industry itself?  How do we get more diverse candidates in the door, and, once they are in, how do we make sure they have access to opportunities to advance and succeed? I note here that these are questions we have been asking ourselves throughout the various offices and divisions of the Commission, and we will continue to do so. Second, I am interested in your perspectives on how we might be able to leverage the resources of the Commission and the asset management industry to provide increased investment services and opportunities to a broader, more diverse base of Main Street investors.

Regarding today’s second agenda item, I welcome your discussion about data privacy and technology’s impact on investment advice.  Our principles-based framework for the regulation of investment advisers provides flexibility to advisers to meet their responsibilities while tailoring their services to the needs of their individual clients, all within the context of the investor protection requirements of that framework.  This flexibility can, in part, facilitate advisers’ use of technology to increase investors’ choices in how they wish to receive investment advice and to interact with their advisers.  We have seen this flexibility at work, first hand, as much of the industry has moved to a telework or “virtual” posture in response to COVID-19. 

Speaking more generally, many investors expect to be able to use the same types of technology for receiving advisory services that they are able to use when receiving many other types of services and products.  At the same time, investors may seek choices in how their personal data is made available to and used by their investment advisers, just as they may seek choices in how they interact with those advisers.  Further, data privacy laws and other restrictions on the use of and access to individual client data may affect how advisers are able to leverage technology while satisfying their regulatory responsibilities.  I hope that these and other issues can be discussed in a meaningful way today, and I look forward to hearing from the panelists about the innovation you are currently seeing in the industry.   

Thank you again for your time both in preparing for and attending today’s meeting.  I look forward to an informative discussion.