How can advisors justify why it makes sense–and cents–for investors to work with them? One concrete way to show clients how you add value can be with investment ideas that might not occur to them. Jeff Mortimer talks–and listens–to a lot of advisors in his role as CIO-Equities at Schwab Investment Management and Laudus Funds. He sat down with IA Editor-in-Chief Jamie Green and Senior Editor Kate McBride on March 13.
Tell us about your new fundamental index funds.
We're in the quiet period; they're launching April 2. There are three: the RAFI 1000 domestic; a small-mid domestic product; and an international version.
What's the RAFI?
It's an index by FTSE and Rob Arnott's Research Affiliates Fundamental Index–RAFI.
Have you had clients ask about fundamental indexes?
That's not where it came from. In our product line we have about $24 billion in cap-weighted indexes, but there's an issue in the market about cap-weighted indexing: is it the best way to index, is it the only way to index? Cap-weighted indexing has been around for 50 years and it has really never been challenged. Along comes a very bright man [Arnott] who is challenging it. We want to offer these other indexes so investors have a choice.
