Financial Planning: The PIMCO & Gross Breakup: What Advisors Need to Know

PIMCO’s assets have shrunk by $10 billion in the few days since Bill Gross’ bombshell announcement that he was jumping ship from the firm he founded to manage funds for Janus. Clearly, investors have a decision to make: will they follow Gross and count on his midas touch to return, despite 16 straight months of outflows to the fund he manages, or will they stick with PIMCO, trusting the fund strategy to remain dependable even without Gross at the helm?

If nothing else, PIMCO’s current debacle is a reminder that one rock star manager is not enough to define a brand, particularly in times of trouble.  Having a strong second-in-command who is known to investors can be vital in times of crisis, when investor confidence needs bolstering. The PIMCO brand story is so closely aligned with Bill Gross that, in his absence, the story loses traction even when the strategy remains the same. Having multiple managers that investors are comfortable with goes a long way towards reinforcing a consistent strategy even when the face of a fund is gone.

Financial Planning consulted with several industry experts, including SunStar’s Dan Sondhelm, on what advisors need to know in the aftermath of Gross’ departure. For the full story, please click here.