Insight-led distribution meets the challenges of asset management
Proactively drive distribution excellence
A challenging environment calls for asset managers to think creatively and act decisively. Implementing insight-led distribution is an effective way to not only increase market share and disrupt competitors but drive ROI. How can you transform insight into value? Focus on process, collaboration, and innovation.
Aligning the past and present in asset management
The retail asset management industry is in the midst of short-term pressures meeting long-term trends. After years of bull markets, stable and successful investors, comfortable advisor relationships, and relatively quiescent regulators, retail asset managers are greatly challenged.
Here are today’s indisputable facts:
- More than 8,000 active and passive funds are available to retail investors in the US.
- Net new inflows in the US accounted for less than one percent of AUM in 2015.
- The Department of Labor and the digital revolution are upending the value of established sales practices.
- Highest-value investors are set to begin liquidating assets to pay for retirement.
- Equity and fixed income markets continue to face significant volatility and interest-rate risk.
Old models are threatened and distribution expenses are under increasing shareholder and regulatory scrutiny. In this environment, what can asset managers proactively do? Think creatively and act decisively. What benefits will that have? Preservation of market share and disrupted competitors. We have seen strategic responses ranging from product innovation to acquisitions and operational effectiveness. However, nearly all asset managers want to drive better return on their investment in their distribution teams.
Insight-led distribution is the practice of defining and executing a distribution strategy according to deep, data-driven knowledge of clients’ potential value and behavior. It brings together disparate data sources, sorts signal from noise, defines target segments and value propositions, and embeds that value in sales practices and enabling tools. As you will see in our report, most asset managers invest in data. Few succeed in turning data into insight, and fewer in turning insight into value.
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Break ground by focusing on three areas
Understanding a client’s potential lifetime value and how best to serve their investment needs is a long-sought goal of distribution leaders. Firms are also working to centralize and standardize data sources to support rich analytics across internal trade and asset data, broader market intelligence, and activity on digital properties.
Retail asset management is a long way from the sophistication of online shopping tools that present relevant items to each individual shopper. Insight is an indispensable strategic anchor and drives meaningful innovation. And asset managers need to capitalize on it to make their investments in data worthwhile.
To realize return on data investments, asset managers should focus on three key themes of distribution excellence:
- Supercharging processes to drive near-term productivity for their sales and marketing teams.
- Enhancing collaboration to overcome long-standing barriers between sales, marketing, and investments teams.
- Enabling innovation to tap into new markets, sell through new channels, and define new offerings.