Cincinnati, OH – Touchstone Investments, a seasoned asset manager recognized for its commitment to actively managed mutual funds and exchange-traded funds (ETFs), is strategically pivoting its focus under the leadership of its new president, Ben Alge. The firm is doubling down on its engagement with the rapidly expanding registered investment advisor (RIA) channel and actively pursuing the burgeoning demand for distinctive active ETF strategies. This dualpronged approach aims to position Touchstone for a future characterized by greater independence, enhanced technological integration, and a renewed emphasis on tailored advisory solutions.
Alge’s ascension to the presidency marks a significant juncture for Touchstone, signaling a deliberate move to deepen its roots within the RIA community. The firm believes that the growing segment of independence-minded RIAs, coupled with a persistent investor appetite for actively managed strategies that offer unique value propositions, will define the asset management landscape over the next decade. Touchstone’s core philosophy of offering "distinctively active" approaches, applied across both its mutual fund and ETF offerings, is being honed and extended into key market segments such as fixed income and international equities.
The Strategic Embrace of the RIA Channel
The decision to intensify focus on the RIA market is, according to Alge, a natural evolution for Touchstone. "Targeting the RIA market has felt like a very natural extension of who we are," Alge stated in a recent interview. "This market is a great fit for what we do. Advisors don’t go the RIA route by accident – they choose independence because they want to think differently and build something intentional." This intrinsic alignment, he believes, makes Touchstone an attractive partner for advisors seeking to cultivate unique client-centric practices.
Touchstone’s approach to serving RIAs is evolving beyond traditional sales models. Recognizing that many leading RIAs, particularly the larger consolidators, operate with sophisticated investment frameworks akin to traditional wirehouses, Touchstone has restructured its sales and support teams. This recalibration is designed to better cater to the strategic needs of these firms across various coverage points.
Furthermore, Touchstone has invested over a decade in developing a comprehensive suite of tools within its practice consulting program. These resources are specifically designed to help advisors enhance their efficiency, scalability, and ultimately, their growth trajectories. A key development in this program has been its evolution towards a more data-agnostic approach. This allows Touchstone to collaborate effectively with RIAs who may lack extensive internal resources for practice management, despite having a significant need for such support.
The overarching lesson learned from this intensified engagement with RIAs is a clear demand for genuine partnership rather than a transactional vendor relationship. "The early lesson has been clear: RIAs are looking for a true partner, not another vendor," Alge emphasized. "Firms that understand independence, can engage at the right strategic levels and are willing to invest in long-term relationships are the ones that earn trust, and that’s where we’ve been able to make the biggest impact." This sentiment underscores the industry-wide shift towards deeper collaboration and customized solutions within the advisory space.
The Distinctive Advantage of Active Management
Touchstone differentiates its investment philosophy through what it terms "distinctively active" management. This approach focuses on building portfolios that deviate meaningfully from their respective benchmarks, with the explicit goal of generating alpha and adding tangible value for investors. This deliberate divergence from passive strategies is a core tenet of the firm’s offering, particularly within its actively managed mutual funds and ETFs.
The inherent flexibility of active management allows portfolio managers to navigate dynamic market conditions, adjust risk exposures, champion high-conviction investment ideas, and leverage deep expertise within specific market niches. "Active management gives portfolio managers the flexibility to adapt as markets change, adjusting risk, emphasizing high-conviction ideas and drawing on deep experience within specific segments of the market," Alge explained. He further highlighted that when managers possess years of dedicated focus on a particular asset class or strategy, their accumulated expertise, skill, and disciplined approach become critical inputs in achieving fund objectives. For investors seeking differentiated outcomes, robust accountability, and sophisticated risk management, actively managed strategies are positioned as powerful tools.
The Ascendancy of Active ETFs
The asset management industry has witnessed a pronounced surge in demand for actively managed ETFs. This trend reflects advisors’ desire to harness the structural benefits of the ETF wrapper – such as liquidity, transparency, and tax efficiency – while retaining the agility and decision-making capabilities of active management. "We’ve seen strong and growing demand for actively managed ETFs as advisors look for ways to combine the benefits of the ETF structure with the flexibility of active management," Alge observed. The seamless integration of these features has resonated strongly with the advisory community.
The areas attracting the most significant investor interest in active ETFs are typically those where discretionary decision-making is most impactful. Fixed income stands out as a prime example, especially in the context of evolving interest rate environments. In such scenarios, flexibility and astute risk management can yield substantial benefits. Touchstone has noted a high volume of discussions with advisors regarding its three fixed income ETFs, as these products offer advisors avenues to generate income and actively manage risk for their clients.
Beyond fixed income, active ETFs have also experienced a resurgence in interest within international markets. What was once considered a less prominent space has regained favor, with the ability to diversify domestic equity risk and capitalize on the tax efficiency of the ETF structure providing a welcome refuge for investors. Touchstone’s strategic expansion of its "distinctively active" philosophy into the ETF space is a direct response to these evolving advisor needs, offering high-conviction, thoughtfully managed strategies in a structure that aligns with contemporary portfolio construction methodologies.
The Evolving Landscape and Touchstone’s Future Trajectory
Looking ahead, Alge expresses a cautiously optimistic outlook for the asset management industry. "I think the future of this industry is incredibly bright," he stated. "At the end of the day, wealth still needs to be invested, and people still need security, income and confidence heading into retirement. That fundamental need isn’t going away."
However, Alge also acknowledges the inevitability of ongoing industry transformation. Technological advancements, particularly in artificial intelligence and data analytics, are already reshaping client engagement, needs assessment, and the delivery of client experiences. These innovations are poised to further enhance investment outcomes and democratize access to financial advice and solutions.
The industry may also witness continued consolidation, alongside a broader shift towards ETFs and other lower-cost, more efficient investment structures. Such trends are likely to exert pressure on profit margins, compelling firms to be more deliberate about where they can demonstrably add value.
For Touchstone, the company is building upon a robust foundation. Alge credits his predecessors, including Blake Moore, for significantly bolstering the firm’s capabilities, expanding its product offerings, and investing in its people. This has been achieved while steadfastly upholding Touchstone’s philosophy of refusing to settle for mediocrity. "As president, my priority has been continuing that momentum – supporting the team and staying focused on what we do best: delivering distinct, active strategies and continuing to evolve alongside them as the landscape changes," Alge affirmed.
Lessons from Leadership
Since assuming the presidency a year ago, Alge has gained profound insights into the nature of leadership. "The biggest lesson I’ve learned since becoming president is that the role completely redefines what ‘doing a good job’ means," he reflected. In his earlier career, success was often measured by individual performance and the ability to excel in specific roles. While this mindset may have facilitated career advancement, Alge now recognizes that in a leadership capacity, the paramount importance lies in assembling the right team and empowering them to achieve their full potential.
"Great outcomes come from great team dynamics, trust and empowerment, not heroics," Alge asserted. He believes that when the right individuals are brought together and provided with the necessary support to execute their responsibilities, exceptional results naturally follow. The true measure of effective leadership, in his view, is witnessing the team’s success independently, without constant direct intervention. This emphasis on fostering a collaborative and empowered environment is central to Touchstone’s strategy for navigating the complexities of the modern asset management landscape.
The firm’s strategic focus on the RIA channel and active ETFs, under Alge’s guidance, is not merely a tactical adjustment but a fundamental reorientation designed to capitalize on emerging trends and cater to the evolving needs of both advisors and their clients. By embracing independence, leveraging technology, and championing its distinctive active management approach, Touchstone Investments is positioning itself for sustained growth and relevance in a dynamic financial ecosystem.
