When it comes to the distribution (sales and marketing) of investment products, the variability of product value, changing market conditions and economic outlooks, evolving consumer preferences and behaviors, and technological advancements make the future uncertain. But if there is one certainty in our world, it is that the future distribution landscape will look quite different from the distribution landscape of the past.
SS&C joined two distribution leaders—Rachel Jacobs of Macquarie and Tom Morelli of T. Rowe Price—on stage at the recent ICI Leadership Summit to discuss concepts and themes from our “Untangling the Web: A Practical Approach to Modernizing Asset Management Distribution” whitepaper. We discussed how asset management distribution organizations are evolving to meet the demands of financial advisors in the future state of wealth management.
We are pleased to share a few key takeaways from our conversation, but first, a quick thank you to SS&C’s Lee Kowarski for a terrific job moderating the panel and leading an extremely engaging conversation.
The key takeaways from the panel were:
- Obtaining and Utilizing the Right Data: Given the complexity of modern distribution and the rapid pace of change, many distribution leaders are finding themselves in a position where they need to upgrade their engagement strategies. However, a complete strategic overhaul is not only disruptive but also unrealistic for the vast majority of firms. For many firms, resource and budget limitations are real inhibitors to modernization efforts, on top of the required willingness and appetite to implement significant organizational changes. Data plays an essential role in this effort and will be a necessary tool in informing top-level strategic decisions as well as ground-level advisor interactions. The acquisition of the “right” data is essential as firms modernize their distribution and engagement strategies. The wrong data (or just a lot of “data for data’s sake”) can actually work against the execution of your firm’s strategy. Match your data needs to your goals and you will start on the right track.
- Focus and Precision: Rarely can a single firm stand for all things or be all things to everyone. In that respect, distribution leadership must have focus and precision in identifying key firms, segments and customers to ensure that capital (monetary, technological and human) is allocated exactly where it will make the most impact in driving your organization towards its goals. This means making tough decisions on who to work with and who not to, and/or working with different firms and advisors in different ways. Data obviously plays a critical role in assisting with these decisions and requires firms to “know your numbers” to carefully craft how, where and when limited capital is allocated.
- Organizational Flexibility: A distribution modernization effort is a complicated and time-consuming endeavor. There is no single correct outcome for the exercise. Indeed, that is precisely the point. Each firm must identify and address the issues and objectives most salient to their own success and do what’s best for their organization. While industry benchmarks are important, no single firm is the same, and thus, no single firm should try to replicate the success of others. There are obviously important lessons to be learned and best practices to share, but each asset management organization must remain flexible in how you pursue your own unique advancements in your distribution efforts.
Firms that fail to pursue distribution modernization efforts risk leaving opportunities on the table and falling behind. The bottom line: asset managers need to develop a game plan for how to engage most effectively with their clients in this new environment—from what products best suit their clients’ needs to how they interact with them day in and day out. Data, focus and flexibility are three pillars to build into that plan.
In addition to the whitepaper noted above, you can also read more in our “Leveling Up Distribution in a Post-COVID World” whitepaper.