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Magazine Issues » April 2022

Roundtable: Achieving personalisation at scale

The lines between asset and wealth management are continually blurring. A Funds Europe panel debated the operational impact of this convergence and what firms can do to enable personalised services at scale.


Mark Gillan (Head of product, AJ Bell)
Rajeev Tummala (Director, digital and data, securities services, HSBC)
Josh Wade (Product manager, Calastone)

Funds Europe – Why are the lines between asset and wealth management blurring?

Mark Gillan, AJ Bell – They seem to be blurring faster than ever and that hints at an underlying process of democratisation. There is a move from the traditional sense of this being an industry for the wealthy with enormous amounts of investable assets to something that the person on the street with £25 or less can invest and become part of that community.

Rajeev Tummala, HSBC – It is also about proximity. Today we expect most of the services to be delivered when we want, where we want, and some of the services are also free, and that goes hand-in-hand with personalisation. So I need something that fits my purpose. I need it to be a lower ticket size and I don’t want the average product that is being sold to everyone. I need that product to cater to my own requirements. For that kind of aspiration, you can’t have the current value chain. The feedback system is too long.

You also want some amount of customisation and personalisation, even at the distributor end. Just as the distributors are feeling pressure, so you’ve got to be able to manufacture and be at the further end of the value chain and that means either the distributor has to manufacture, or the asset manufacturer has to distribute. Both these trends are actually pushing the value chain to contract.

Thanks to technology, it’s no longer as hard to do these things. In the past, if the asset manager had to distribute, you had to have physical locations, but the internet provides that access. At the same time, the electronification of financial markets and the rise of passive products means you can create more dealer advisers at the distributor’s end as well, so that’s also aiding them. There’s a large element of digitisation as well that is contributing to this trend.

Josh Wade, Calastone – The thing that’s driving this blurring is definitely the asset manager moving leftwards in the industry towards distribution, and that’s driven by two things: one is the market environment and fee pressure. Whenever you have an industry where margins are compressed, you see that horizontal move in terms of business models.

The other thing is that we live in a world where technology enables that move to be successful. It’s not a gamble to set up a compelling website or a D2C proposition or to have a more real-time or embedded link with your distribution party who is responsible for distributing your product, because things like the APIs, the infrastructure, the embedded technology, make that really simple and actually more engaging for the end customer to engage with.

Asset managers now want to have more of a say in setting the terms of their pricing, they want to have closer proximity to the end investor physically by compressing the overall lifecycle or the overall value chain.

There is also this expectation around personalisation that has been baked in from other industries, so the same investor who’s engaging with you as a fund manager or a wealth platform to get a service is also a client of Amazon or is also a client of Netflix where as soon as they log on, they are met with products that are tailored for their interests. It’s an expectation that the asset manager is having to respond to.