Core satellites, defined alpha and schmeeks were some of the topics at the center of a roundtable discussion of fund industry CEOs at the ICI General Membership Meeting Thursday morning. The annual conference has brought together more than 1,200 mutual fund industry insiders at the Marriott Wardman Park in Washington D.C. The meeting will end Friday at lunch.

The only head of a non-U.S.-based business on the four person panel raised the concept of defined alpha. Invesco Perpetual head James Robertson raised the term, explaining that purchases of fund products are now seeking an outcome from their investments whether it be for retirement income or some other purpose. Products that provide those outcomes would, of course, need to define their alpha to investors upfront. In short, Robertson may have hit on a more elegant term for what fundsters in the U.S. call be the clunky name of retirement income.

Bill Glavin, who heads OppenheimerFunds, brought up satellite funds, another little-heard term for a well-known concept. Addressing a question on the growing use of flexible mutual funds posed by JPMorgan Funds chief George Gatch, Glavin confirmed that he sees the trend.

"We are seeing a much greater use of derivatives in portfolios," admitted Glavin. He observed that prior to 2008 asset managers were more focused on lowering minimums to get more investors into hedge funds. More recently, asset managers have changed course and are adding hedge-fund-like strategies to mutual funds. In short, they are going to the investors rather then trying to bring the investor to them.

Glavin called this shift part of a trend to satellite funds. These are funds that orbit around the core investment funds held by shareholders. These are specialized funds such as absolute return products or commodity funds or others that are designed to be used by advisors seeking to accent the client's holdings.

And all four panelists agreed that the advisor, or what Fidelity's Ron O'Hanley called the gatekeeper, is growing in importance. Answering Gatch's question of the coming together of institutional and retail markets. O'Hanley said the trend is being driven by the rise in professionalism of so-called gatekeepers, his term for a financial advisor or intermediary.

Later, Glavin underscored the shift in how advisors approach the use of mutual funds and that the change is causing OppFunds to reassess how it approaching wholesaling and key accounts.

"It is not about who you know and who you played golf with last week," said Glavin.

He also dropped another new term: schmeeks.

"These are 'schmoozing geeks'," Glavin explained, referring to wholesalers and key account reps.

"I love that term 'schmeeks', maybe I am going to take it home," joked O'Hanley.

Glavin says that OppFunds "upgraded and replaced the wholesaling organization that we have because the marketplace and the gatekeepers are becoming more sophisticated. He noted that wholesalers in the past had to be skilled in socializing; now they need to understand that data that advisors are using to make their decisions.

Much of the discussion also focused on the increasingly global nature of the mutual fund business.

One key term here is RDR, said Invesco Perpetual's Robertson. RDR, of course, is short for Retail Distribution Review. That regulatory effort is still underway and may not take effect in overseas markets for a couple of years.

What is RDR? Robertson explained that it is when the fund manager is paid as a fund manager, full stop.

"They are not to be collecting for the advisor. The client and the advisor decide those issues. It takes the fund manager out of the paymaster role," Robertson said.

"I guess we do do that, we take it for granted," he reflected.

The goal of RDR is threefold, explained Robertson.

The first goal is to create a "more professional advisor" bring the profession up to the level of a lawyer or account, said Roberton.

The second is to level the playing field across all products.

The third is to remove bias created by commissions.

In Robertson's opinion RDR will mean that funds will have to have more consumer appeal but will not eliminate the advisor.

"People will still seek advice, so must work with advisors," he said. "We also felt we are stronger if when we are recommended that the client say 'Oh, yes! I have heard of that.'"

Earlier Robertson explained that consumer increased information disclosures -- which he called CIIDs -- are an important theme in Europe. The emphasis on disclosure stems from a shift from the use of off-shore funds to cross-border funds as Europe works on harmonizing its treatment of tax and pension rules.

Indeed, it is tax issues that mean that off-shore funds are not coming back anytime soon in his view.

"I think every single tax entity in the world is after off-shore as a way to make up their shortfall," said Robertson. 

Correction: A prior version of this story misrepresents Bill Glavin's new term, 'schmeek.' He used the word to refer to wholesalers and key account reps.

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