Cincinnati-based asset manager Touchstone Investments is strategically positioning itself for a future defined by independent registered investment advisors (RIAs) and the growing demand for sophisticated, actively managed strategies. Under the leadership of new president Ben Alge, the firm is intensifying its focus on the rapidly expanding RIA channel and leveraging the distinct advantages of actively managed mutual funds and Exchange Traded Funds (ETFs) to cater to advisors seeking differentiated outcomes and a more independent, technology-driven advisory landscape.
Alge, who assumed the presidency of Touchstone Investments in late 2022, has articulated a clear vision: to deepen the firm’s engagement with RIAs by understanding and aligning with their independent ethos. This strategic pivot acknowledges the evolving dynamics of wealth management, where RIAs are increasingly becoming the dominant force, driving innovation and client-centric solutions. Touchstone’s commitment extends to its "distinctively active" investment philosophy, which permeates its offerings across both mutual funds and ETFs, with a particular emphasis on key asset classes like fixed income and international markets.
Deepening Engagement with the RIA Channel: A Natural Evolution
The decision to prioritize the RIA market, according to Alge, is not a departure from Touchstone’s core identity but rather a natural extension of its capabilities and philosophy. "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." He further elaborated on the inherent alignment between Touchstone’s approach and the motivations of RIAs. "Advisors don’t go the RIA route by accident—they choose independence because they want to think differently and build something intentional. If I were an RIA putting a flag in the ground, I’d want to know that Touchstone understands what I’m trying to accomplish. This alignment has made us an attractive partner."
This strategic alignment is supported by a significant evolution in Touchstone’s practice management offerings. Recognizing that many leading RIAs, especially larger aggregators experiencing consolidation, now operate with investment decision frameworks similar to those found in traditional wirehouses, Touchstone has restructured its sales approach. This involves bolstering its team to ensure dedicated and effective service across key strategic coverage points for RIAs.
For over a decade, Touchstone has been cultivating a suite of tools designed to enhance advisor efficiency, scalability, and ultimately, growth. The firm’s practice consulting program has become increasingly data-agnostic, allowing Touchstone to collaborate effectively with RIAs who may lack extensive internal resources for such functions but possess a profound need for them. This approach underscores a fundamental lesson learned: RIAs are seeking genuine partners, not merely transactional vendors. "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."
The Distinctive Edge of Active Management
Touchstone’s commitment to "distinctively active" management is a cornerstone of its strategy, offering a compelling alternative to passive investment vehicles. Alge defines this approach as building portfolios that intentionally deviate from their benchmarks with the explicit goal of adding value. "At Touchstone, we think about active management as being ‘distinctively active,’ building portfolios that are intentionally different from their respective benchmarks and designed to add value," he explained. "That’s one of the key advantages active mutual funds and ETFs can offer."
The inherent flexibility of active management allows portfolio managers to adapt to dynamic market conditions. This includes adjusting risk exposures, prioritizing high-conviction investment ideas, and drawing upon deep expertise within specific market segments. When a manager possesses years of focused experience in a particular asset class or strategy, their skill, discipline, and nuanced understanding become crucial inputs for achieving fund objectives. For investors seeking outcomes that diverge from market averages, robust accountability, and sophisticated risk management, actively managed strategies present a powerful avenue.
Riding the Wave of Active ETFs: Differentiated Solutions in Demand
The rise of actively managed ETFs represents a significant trend within the asset management industry, and Touchstone is at the forefront of this movement. Alge observes a strong and escalating demand for active ETFs as advisors seek to combine the structural benefits of ETFs—liquidity, transparency, and tax efficiency—with the dynamic 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 noted. "Active ETFs offer liquidity, transparency and tax efficiency, while still allowing managers to make real decisions as markets change, and that combination has really resonated."
The areas attracting the most attention for active ETFs are precisely those where nuanced decision-making and active risk management are paramount. Fixed income has emerged as a particularly prominent sector, especially in the context of shifting interest rate environments. The ability to adapt strategies and manage risk effectively in such conditions can yield substantial benefits for investors. Touchstone’s fixed income ETFs, for instance, are frequently the subject of discussions with advisors looking for ways to generate income and actively manage risk for their clients.
Furthermore, there has been a notable resurgence of interest in active ETFs focused on international markets. Once overlooked by many, international equities are regaining favor, and the capacity of active ETFs to offer diversification from domestic equity markets, coupled with the tax efficiency of the ETF wrapper, has made them an attractive refuge for investors. Touchstone’s extension of its "distinctively active" approach into the ETF space is a direct response to advisor demand for high-conviction, thoughtfully managed strategies delivered in a structure that aligns with their current portfolio construction methodologies.
The Future Landscape: Technology, Consolidation, and Value Creation
Looking ahead, Alge foresees a dynamic and evolving industry characterized by continued technological advancements, ongoing consolidation, and a persistent focus on value creation. "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, he acknowledges that significant shifts are inevitable. Technology, particularly artificial intelligence and enhanced data utilization, is already transforming how firms engage with clients, understand their needs, and deliver superior experiences. These advancements are expected to further improve investment outcomes and enhance the accessibility of advice and financial solutions.
The trend of industry consolidation is also likely to continue, alongside a broader migration toward ETFs and more cost-effective, efficient investment structures. These forces will inevitably exert pressure on profit margins, compelling firms to be more deliberate in identifying and delivering areas where they can truly add value.
Touchstone’s Trajectory: Building on a Strong Foundation
For Touchstone, the path forward is built upon a robust foundation laid by previous leadership. "At Touchstone, what’s exciting is that we’re building on a very strong foundation," Alge affirmed. "Blake Moore and the leaders that came before me did an incredible job of bolstering our capabilities, growing our product suite, and investing in our people, all while reinforcing the philosophy that Touchstone doesn’t settle for ordinary."
As president, Alge’s primary objective is to sustain this momentum. This involves supporting the team and maintaining a steadfast focus on Touchstone’s core strengths: delivering distinctive, active strategies and continuously adapting to the evolving financial landscape.
Leadership Evolution: The Power of Team and Empowerment
Reflecting on his tenure as president, Alge has gained profound insights into the nature of leadership. The most significant lesson has been the redefinition of what constitutes success in a leadership role. "The biggest lesson I’ve learned since becoming president is that the role completely redefines what ‘doing a good job’ means," he shared.
Earlier in his career, Alge’s success was often attributed to excelling in individual roles through sheer hard work, intellectual prowess, and execution. While this mindset may have facilitated career progression, stepping into a leadership position has revealed the paramount importance of selecting the right team members and empowering them to achieve their full potential.
"Great outcomes come from great team dynamics, trust, and empowerment, not heroics," Alge concluded. "If you get the right people in the room and give them the support to do their jobs, that’s where you’ll see success. When you see the team succeed without you being in the middle of everything, that’s when you know you’re doing the job right." This philosophy of collective success, fostered through trust and empowerment, is now a guiding principle as Touchstone Investments navigates the future of asset management.
