Today T. Rowe Price
announced that it has named Scott David
the head of a new unit combining both sales and retirement plan services. MFWire
spoke with insiders who said that with this move, T. Rowe is betting on a new vision for its future.
Former senior T. Rowe executive John Cammack
said that by making Scott David
its new sales and retirement czar, T. Rowe Price is preparing for a future centered around customer experience, particularly those of advisor and retirement product customers.
Cammack was formerly T. Rowe's head of third party distribution and a member of the firm's executive committee.
He says that David has demonstrated the skills necessary for capitalizing on all the synergies of these operations, be they record keeping, communication, plan participant support, what have you.
"I think having these three areas report to one executive will create a number of emerging synergies between all three businesses, and will greatly improve customer support," Cammack says.
On the surface, it may seem like there are two distinct parts of the business: investment management, which centers around leveraging the firm's intellectual capital to generate competitive returns, and all the operations devoted to crafting intelligent asset allocation solutions for clients as well as communicating the value of these solutions to plan sponsors, investment advisors and retail customers.
At the end of the day, Cammack says, these seemingly disparate functions need to serve a single overriding vision: customer experience.
"If you understand the thinking of an advisor or customer of a direct contribution or 401(k) plan, then you have the behavioral wisdom to help them improve their decisions," he says.
Moreover, Cammack said, unifying all three sales arms under David is a sign that T. Rowe is committing to this long-term customer-centric vision, as well as committing long-term to David's potential as a leader.
"I think what you have are the beginnings of a succession process by placing David in a significant leadership role related to distribution," he says.
Cammack adds that it is no surprise that David was able to demonstrate gifts at aligning synergies. He says that David, who is a former Fidelity exec, has blended the best of the leadership philosophies at both schools. Fidelity, he says, has more of a tightly disciplined top-down command structure, while T. Rowe's process is more collaborative and consensus-driven.
"Scott was able to find a balance between the two in a fairly short period of time, such that he was able to convince the board and the management committee that they could really build around his leadership," he says.
And, Cammack added, it is not uncommon for T. Rowe look years in advance when crafting succession and strategy plans.
"They've looked far ahead and made the decisions that this is an individual in which they have the confidence will provide leadership over a very important part of the future.
Recruiting executive George Wilbanks
said that David has been "battle-tested" running one of the most important businesses in Fidelity for 15 years.
"Scott David is great guy, and it was a real coup for them to recruit him. It doesn't surprise me that they are expanding his responsibilities because he is one of the better leaders in the investment industry today," he says.
The key is not only his skills, Wilbanks says, but the way that he has been able to fit within T. Rowe's culture.
In line with Cammack's insights into T. Rowe's culture, Wilbanks said that T. Rowe has a very collegial and highly collaborative culture, which is at the same time very performance oriented.
"People expect a lot from their peers, and that is a very unique sort of environment," Wilbanks says. "It was lucky match, a very good match, hiring David."
Moreover, Wilbanks said that it has become "best practice" uniting the asset management and retirement operations given the fact that the vast majority of a customer's assets are in some way tied to retirement.
Meanwhile, former colleagues of departing executive Cynthia Egan
noted her contributions and importance to T. Rowe.
"She was a great asset to that firm. She was good for the industry," says friend and former colleague Heidi Walsh.
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