Bill Overview
Title: Too Narrow to Succeed Act
Description: This bill requires federal institutional investors to report on their use of diverse-owned asset management firms. Additionally, the Department of Labor must conduct a survey of public- and private-sector pension plans regarding best practices for increasing the utilization and capacity of diverse-owned asset management firms.
Sponsors: Rep. Beatty, Joyce [D-OH-3]
Target Audience
Population: People working in or associated with diverse-owned asset management firms or pension plan beneficiaries
Estimated Size: 5000000
- Federal institutional investors will need to adjust their reporting practices and possibly their investment strategies to comply with the new requirements.
- Diverse-owned asset management firms may be directly impacted as the increased focus could lead to more business opportunities and potentially to broader industry changes.
- Employee pension plan administrators, particularly in the public and private sectors, will be affected as they may need to revise practices and policies based on survey results and recommendations.
- Individuals with pension plans, especially those employed by organizations that will adopt new practices as a result of the Labor Department's survey, might see changes in how their pension funds are managed.
Reasoning
- The policy is geared towards increasing transparency and inclusivity in asset management, primarily focusing on federal institutional investors and diverse-owned firms. The budget covers surveys and implementation efforts.
- Federal institutional investors are a small, specialized group tasked with adopting the new reporting standards. Their direct exposure to the policy will vary based on existing structures and adaptability, but the policy impact might be moderate due to the mandatory nature of the reporting requirements.
- Diverse-owned asset management firms might see significant impact due to increased visibility and potentially new business opportunities. The effects could range from low to high based on factors like firm size and existing client base.
- For pension plans, changes will depend on administrative practices and the reforms encouraged by survey results. However, individual beneficiaries might not notice immediate changes in their wellbeing unless they see tangible improvements in pension management approaches.
- Given the focus on institutional and administrative layers, individual impact might be limited initially, with broader effects taking root over the longer term.
Simulated Interviews
Institutional investment manager (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- I think the policy will increase our workload with new reporting requirements, but it's a necessary evolution towards more inclusive practices.
- Long term, it might shift some investment strategies to be more inclusive of diverse firms.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 8 |
Pension Plan Administrator (Chicago, IL)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- This act will require us to update our procedures which might increase costs and efforts initially.
- However, promoting diverse asset managers is a positive step, which could improve fund performance and integrity.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Owner of a Diverse-Owned Asset Management Firm (San Francisco, CA)
Age: 50 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- This policy could open up new markets for my firm, increasing our visibility and client base gradually.
- I support initiatives that level the playing field for firms like ours.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 7 |
Retiree with a Pension Plan (Dallas, TX)
Age: 60 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- I doubt I'll see much of a change in my daily life or pension from this policy.
- More transparency in where the funds go could give peace of mind, which is always good.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Junior Analyst in Federal Agency (Seattle, WA)
Age: 29 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- This policy seems like a step towards more accountable and informed investment strategies.
- As someone new in the field, I might see career growth opportunities if diverse firms we analyze begin to expand.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Financial Advisor (Atlanta, GA)
Age: 55 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- Increasing practices that favor diverse firms is welcoming news.
- I anticipate advising clients who wish to integrate these diversified portfolios.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Investment Risk Manager (Boston, MA)
Age: 41 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 5/20
Statement of Opinion:
- Identifying more diverse firms for investment could balance our risk portfolio.
- Reporting requirements are cumbersome but potentially rewarding.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Consultant for Pension Plans (Miami, FL)
Age: 48 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- This policy enhances my advisory opportunities as pensions look to include more diversity in their investments.
- We anticipate needing to educate boards on new best practices.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Administrative Assistant at Asset Management Firm (Houston, TX)
Age: 36 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 4/20
Statement of Opinion:
- Our focus will likely be on compliance and optimizing any new opportunities this policy may open up.
- It's an exciting prospect for development and career growth in the industry.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Tech Industry Worker with Pension Plan (Denver, CO)
Age: 30 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 9/20
Statement of Opinion:
- Knowing my pension plan considers diverse managers gives me reassurance about ethical practices.
- I don't expect day-to-day changes, but it's a step for transparency.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $3500000 (Low: $2500000, High: $4500000)
Year 2: $1000000 (Low: $800000, High: $1200000)
Year 3: $1000000 (Low: $800000, High: $1200000)
Year 5: $500000 (Low: $400000, High: $600000)
Year 10: $250000 (Low: $200000, High: $300000)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The policy's effectiveness heavily relies on the accurate reporting and transparency of federal institutional investors.
- Initial government costs may be offset by savings and private-sector efficiencies over time.
- Long-term economic and social benefits may arise from encouraging diversity in asset management.