ex-DFA star Michael Lane takes big job at BlackRock as head of ETFs to RIAs
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After 14 years at Dimensional Fund Advisors, Michael Lane is the new head of New York's US Wealth Advisory iShares for BlackRock Inc., though he'll stay in his Texas home.
The hire comes amid the $6-trillion asset manager's multiyear push to widen its share lead in the exchange traded fund market. See: How BlackRock stopped Vanguard from devouring ETF market share by pleasing RIAs -- but how that strategy could endanger iShare profit margins in the long run.
BlackRock can use Lane to create a more organic connection to RIAs, says Alex Potts, CEO of Loring Ward, a DFA TAMP that manages about $16 billion.
"Michael totally understands advisors," he writes in an email. "Michael will bring to BlackRock his understanding of advisor communities and how to build those communities. BlackRock may not have the brand cache -- read loyalty -- of a DFA, however many of their investment solutions are really good. I also suspect that many DFA advisors also utilize BlackRock strategies, so this should only reinforce that usage."
Potts continues: "His role at DFA was primarily on the retirement side (he migrated from the advisor side about five years ago) and my impression is that he did a good job, however the potential for that retirement division within DFA was much more limited than the massive opportunity that was presented from BlackRock."
Lane will oversee the iShares Leaders team, led by Madeleine Sinclair, and report jointly to Salim Ramji, head of US Wealth Advisory, and Martin Small, head of US iShares.
"As our iShares business within US Wealth crosses $1 trillion in assets, Michael’s goal is to help us reach the next trillion in growth by helping advisors build better portfolios with our core, fixed income, factor and model-based ETFs," reads an internal memo issued by Ramji and Small earlier this month.
Lane joined Austin, Texas-based DFA in 2004. Most recently he served as global head of strategic retirement initiatives.
From 2012 to April 2017, he was CEO of Dimensional SmartNest LLC, the brainchild of DFA economist and Nobel laureate Robert Merton, which provided customized managed account plans for defined contributions. See: DFA takes on life cycle funds by putting an alternative offering in the hands of 401(k)-minded advisors.
Lane's first posting at DFA was as vice president overseeing relationships with TAMPS, broker-dealers, banks and insurance companies.
“We’ve drastically increased the size of our FA [training and consulting] group from 10 to 50 people,” he told Brooke Southall in a 2010 interview with RIABiz. “We’re doing a lot more work with the financial advisory community." See: Dimensional Fund Advisors still has low RIA acceptance rate and stunning growth.
Losing Lane will be, at worst, be a flesh wound to DFA, Potts adds.
"I don’t think it’s an existential threat to DFA. My guess, Michael will do a great job helping BlackRock raise the awareness for advisors and help them build a larger brand around advisors."
Lane will work out of BlackRock's New York offices but will continue to reside in Austin.
In the memo, Ramji and Small also bid hail and farewell to Joe Craven, who was head of US Wealth Advisory iShares for two years, and who is now retiring.
"He championed iShares priorities within US Wealth Advisory and US Wealth Advisory initiatives within iShares. And he was a north star for us and our clients in always operating by “principle #1” - We Are Fiduciaries." See: BlackRock may build the biggest, baddest RIA platform yet as 'Boy Wonder' begins 'Aladdin-izing' FutureAdvisor.
Prior to joining DFA, Lane was director of advisor services at TIAA-CREF.
Client acquisition in a difficult market environment would be favorably attracted to the brand of Citi and the fee based advisory expertise of established and Citi affiliated RIAs. Brokerage and advice are not mutually exclusive, it all depends on the level of counsel the client will allow. If the level of client service has not grown beyond transactions and Citi’s transactions brokers are not taking advantage of the robust Citi services offering, then it looks like Citi’s brokers may not be sufficiently adaptable to offer a higher level of counsel McWhinney envisions. If Beacon Point is a stripped down transactions firm with little to offer in terms of advisory services, and the Citi brokers are interested, why should McWhinney return Beacon Point’s call. It seems like there is not a good fit.