Financial advisors looking for an edge in crafting their clients' financial plans and portfolios will gather this week in Chicago to listen to financial industry seers speaking at the 29th annual Morningstar Investment Conference.
In all, some 45 speakers — prophets of profit — are slated to share their insights as they hold sway in 36 scheduled presentations that span three days starting Wednesday. Morningstar Inc. expects more than 2,000 attendees, according to Morningstar spokeswoman Nadine Youssef. Among those are more than 1,300 registered attendees — mainly financial advisors — up about 16% vs. last year.
As usual, financial advisors are coming to hear speakers offer solutions for the advisory world's challenges, which range from how to invest for income amid rising interest rates to which fintech products are best for building advisory practices, how to cope with uncertainties surrounding the pending Department of Labor fiduciary rule and — as always — where to find the best investment opportunities for their clients' varied circumstances.
Youssef told IBD, "We haven't had an official conference theme in recent years. This year's speakers will share their views on navigating this evolving environment for investors and financial advisors, revolving around several timely themes, including adapting to disruptive change, incorporating behavioral finance into the financial planning process, the role of technology in enabling advice, and more. New this year, conference attendees can participate in the conference's interactive Innovation Lab, previewing upcoming developments in Morningstar's products and research, and providing feedback in user testing groups."
Conference speakers are scheduled to include Vanguard founder John Bogle, Morningstar (MORN) CEO Kunal Kapoor and BlackRock (BLK) Chairman Larry Fink.
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First Day
On Wednesday, the conference's scheduled opening keynote speaker is Jimmy Wales, the co-founder of Wikipedia, the online encyclopedia.
Prior to the conference, Wales told IBD through a spokesman that he would speak about threats to the thing that draws attendees to the conference — the free flow of information. Wales said he would speak about "a wide range of issues surrounding the future of technology, including the benefits of a globally connected world with free access to human knowledge."
Wales said he would "particularly focus on the phenomenon of fake news and what can be done to combat it."
Thursday
Michael Kitces, a financial planner and personal-finance commentator, is scheduled to kick off the conference's first full day, Thursday, with a post-breakfast general session presentation, "Future of Financial Planning in the Digital Age."
Kitces told IBD before the conference that his remarks should reassure financial advisors that robo-advisors are not a threat. Instead, robos are a technology that will morph into a tool that human advisors use to expand their own practices. "Robo-advisors will not be competition," Kitces said. "They will be platforms we use to build our businesses. You won't even call them robos, any more than you would give a name to the back-office technology you use now."
"A Flexible Approach to Fixed Income" is on the Thursday afternoon lineup.
What's the value of flexibility? Panelist Elaine Stokes, a manager of the $13.8 billion Loomis Sayles Bond Fund (LSBRX), told IBD that the fund's go-anywhere mandate lets it exploit any place it finds opportunities and skirt riskier parts of the market. "We're using anything from investment grade to high-yield, convertibles, emerging markets," Stokes said.
Bogle's presentation will be the final speaking event on Thursday. In advance of the conference, Bogle told IBD that he will talk about Vanguard's birth as, essentially, a byproduct of his own split with Wellington Management. Wellington said Bogle could start Vanguard as a Wellington division so long as it did not engage in mutual fund management. Increasingly enamored with the then-novel idea of starting an index mutual fund tracking the S&P 500, Bogle persuaded his board of directors that the mutual fund — because it passively tracked an index — would not violate the deal with Wellington that prohibited fund management.
After initially growing slowly, the now-$310.7 billion Vanguard 500 Index Fund (VFINX) eventually soared in popularity.
"I'll also talk about what is the best strategy for active managers in today's index-fund revolution," he said.
Bogle, who is just days shy of his 88th birthday, will not be on-site. His presentation will be via a prerecorded video. His question-and-answer session is slated to be live from suburban Philadelphia.
Friday's Closing Session
On Friday, BlackRock's Fink will provide the conference's closing keynote presentation in the format of a Q&A session with a Morningstar analyst.
Before the conference, a BlackRock spokesman said Fink likely would address investment opportunities and obstacles that he described in his April 10 letter to shareholders.
Fink lamented the large number of workers and retirees who are not financially prepared for their would-be golden years. Part of the solution, he wrote, lies in the investment opportunities that would be created if the massive, unmet infrastructure needs in the U.S. are addressed.
The "Fixed-Income Investing for the 21st Century" panel is due to look at how shareholders can find income amid the factors that are still stifling income generation. Scheduled panelists are Franklin Templeton's Sonal Desai, Pimco's Dan Ivascyn and BlackRock's Rick Rieder.
Before the conference, Rieder told IBD that "being flexible is hugely important." With interest rates rising in the U.S., investors have to diversify beyond U.S. debt. "Look at emerging markets, credit exposure in other parts of the world where rates are staying constant or (moving) lower like Brazil," said Rieder, who is BlackRock's chief investment officer and co-head of its global fixed income platform.
Rieder told IBD he also looks to Mexico, India and Indonesia as what he called "interim hideouts" while U.S. rates rise.
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