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Fund Spy

Hancock's Evolving Culture

Promising changes are under way, but challenges remain.

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With a new CEO at the helm of its retail funds division and a more streamlined board structure now in place, positive changes are afoot at John Hancock. Andy Arnott, the new CEO, was selected from the ranks of the firm's investment research group and brings a well-informed and shareholder-centric perspective to bear on his new role. Similarly, Hancock's decision to consolidate its two fund boards should result in greater consistency in the way the firm develops, prices, and distributes its products across retail and institutional channels.

While recent developments at the firm seem promising, substantial challenges remain. Hancock's funds are too expensive on average, and the managers who run them invest too little. The firm's subadvised business model may be costlier to run than one executed with in-house resources, but Hancock could address both issues by lowering fees. Shareholders would benefit from the economies of scale the firm enjoys as a top-20 fund shop by assets. Lower costs might also encourage Hancock's subadvisors to invest more in the funds they run for the firm.

Shannon Zimmerman does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.