“The client is king.” Businesses across industries focused on client service have ingrained this in their operating philosophy, and the Asset Management industry is no exception.
At present, we’re seeing client service demands focused on three key areas:
- Desire for enhanced returns.
- Demand for improved value, typically through lower fees.
- More responsive and transparent interactions and communication.
To meet clients’ performance expectations, asset managers increasingly are branching out into more sophisticated – often multi-asset – investment strategies. This introduces much greater complexity. If firms are to optimize their risk-adjusted returns, front-office staff will need more timely, accurate and flexible data, analytics and support tools to improve their investment decisions. This driver to multi-asset investment strategies often brings about a search for new technology as manual processes increase operational risk and certainly aren’t free.
In addition to the returns, asset owners expect and deserve detailed performance attribution that explains how and where that performance was achieved – again, a capability that becomes increasingly complicated in a multi-asset world. Firms that can do this well though will have a powerful mandate for gathering new business.
Pressure to lower fees
Across the traditional and alternative asset management worlds, fees have been under pressure for some time. To minimize the squeeze on margins, firms have been finding ways to reduce their costs.
There are two primary ways to do that from an operational perspective. Either streamline the firm’s front-to-back operating environment by replacing inefficient, often labor-intensive functions with scalable technology solutions that can automate and integrate as many processes as possible. Or outsource those processes to a third-party provider that has the automated capacity, scalability, pricing and skill to do it for you cheaper. Again, an opportunity to evaluate technology
Delivering high quality client service
In this day and age, a powerful, multi-channel client experience has become ever more critical to attracting prospects and sustaining customer relationships over the long term.
The almost ubiquitous adoption of mobile technologies, instantaneous access to information and communications, and the rise in demand for do-it-yourself financial capabilities is revolutionizing the investment services landscape. Depending upon a firms’ clientele a quarterly cycle of paper reports and static information, interspersed with the occasional phone call or face-to-face meeting is often no longer enough.
Instead, clients expect access and convenience, so that they remain informed and engaged. Plus they want responsive, on-demand services that are more tailored to their unique requirements.
Incorporating rich digital functionality into firms’ existing offerings and integrating clients’ data across these multiple service channels are crucial to staying relevant. Not only that, but firms need the infrastructure to provide fast and high quality services efficiently and, where required, the flexibility to provide what may be niche services at scale.
If firms are to remain competitive; they must be able to respond not only to the market demands of today, but have the nimbleness to adapt to those of the future. And though certainly not asset management, it is a similar sentiment expressed by a beloved cartoon character “We shall never deny a guest even the most ridiculous request.” Or “What could be better than serving up smiles?” both courtesy of SpongeBob. Well, maybe something could be better than serving up smiles, but in the end, the customer is always right, right?
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Alternative Investments, Asset Management, Wealth Management