Disruption across the asset and wealth management industry has forced industry players to navigate enormous upheavals over the last several years. Despite this disruption, many firms have been slow to adapt—or at least adapt quickly—until the COVID-19 pandemic forced firms to radically change how they function at the most basic levels.
Virtually overnight, asset managers banned travel, closed offices and equipped staff to become remote employees. Previous investments in virtual technology and data were key in separating the leaders from the laggards, but the ability to successfully navigate such sweeping disruption requires far more than that. It takes preparation, foresight and adaptability to recognize opportunity amid rapidly evolving events.
Building resilience through disruption requires firms to pay particular attention to their culture, their products and their business (strategy). Building strength and competitive advantages in these areas requires senior leadership to have courage and conviction in identifying weaknesses in said areas and making the required changes. It may be uncomfortable, but it is necessary to forge a clearer path ahead.
“Growth and comfort do not co-exist”
- Ginni Rometty, Executive Chairman of IBM
We address these key areas in more detail in our recently released whitepaper, After the Storm: Charting a New Course through Uncertainty. Here are some highlights:
- Culture: A firm with a well-defined and strong culture generates up to four times the revenue growth relative to firms without that culture. A strong culture is also critical to thriving amid disruption. It is the glue that keeps a company united in the face of challenges, large and small, and keeps all of the firm’s teams aligned with, and working toward, a common goal. We believe there are five pillars of culture that will assist in building a disruption-resistant organization: customer-centricity, transparency, decentralized decision making, agility and innovation.
- Product: It goes without saying that asset managers need products that perform strongly and meet the needs of advisors and investors in order to succeed. However, in the coming years, the implementation of Regulation Best Interest (Reg BI), the increased importance of fiduciary standards and the trend toward goal-based investing will likely result in even greater emphasis on asset allocation at the expense of individual funds and strategies—a big change from asset and wealth management of the past. We believe that there are four principles for disruption-resistant products in the new era of asset and wealth management: emphasis on customization/personalization, discipline with production rationalization, increased vehicle flexibility, and better partner (intermediary) alignment.
- Business (strategy): While the right culture and products are essential to set the foundation for success, effective on-the-ground execution is also a critical component. On the distribution and customer engagement/service side, we believe that there are four key steps that firms need to take in order to optimize their business to be more resilient during disruption: the integration and alignment of technology across the organization, use of data to improve the customer experience, modernization of the distribution organization, and the attraction and retention of the right talent for your organization.
The ability to harness disruption and forge greater resilience in a rapidly changing future will be a critical trait for firms to thrive in the years ahead. With the right culture, products and business (strategy) practices, asset managers will be prepared to recognize the right opportunities—and be agile enough to seize them.
To learn more about these trends, download our new "After the storm: Charting a new course through uncertainty" whitepaper.
SS&C’s Research, Analytics, and Consulting team can help asset managers target the best opportunities and optimize their distribution efforts.
Written by Matt Fronczke
Senior Director, Strategic Business Consulting