Opinion: Building back a smarter asset management business

As a journalist, I love a coincidence that brings circularity to a narrative, so as I take this column’s baton from Fiona Rintoul, I am pleased to be perched under an arbour in the Highlands of Scotland, penning this from her homeland.

Like her, I felt for many years that my opinion should be kept out of the papers. No one should know my thoughts on any fund manager’s new product or approach, nor what I think of how any custodian’s CEO takes their tea. Yet, as I find myself urging strangers on trains to take independent financial advice before cashing in their defined benefit pension or trying to explain why the cryptocurrency du jour may not be the best investment for my nephew’s pocket money, I think I have amassed enough authority to have a view on the larger issues at play for our sector. Luckily for me, the editorial team feels the same. 

My view this month is informed by both a webinar I hosted for Funds Europe in June and a little pub selling a limited menu of pies and a much larger menu of whiskeys somewhere in Speyside. The theme through both of these episodes was not to miss an opportunity to adapt and improve. 

For the pub, the issue is simple: post-Covid, hospitality is struggling terribly. New ideas and a commitment to strict financial discipline are needed, but understanding how the needs of the consumer are changing is paramount. Gone are the days of just opening up in a prime location and expecting the clients to arrive. The game has changed. They may come, or they may not be permitted to under new social distancing rules. 

For the funds industry, Covid has inflicted minimal (professional) damage, but the pandemic has shone a light on a fundamental shift in consumer behaviour. The demands of the industry’s clients have been changing significantly over the past ten to 15 years on matters ranging from access and transparency, and a huge push into digitalisation, right the way through to a sharper, more targeted focus on ESG.

In the webinar (available online), we were discussing a survey that explored the issues funds professionals were most concerned about. The economy and regulation were top of the agenda, but what struck the panel was a lack of introspection from the sector. There seemed to be little urgency to see what it could do to meet the challenges and demands of clients. 

Newsflash: Old people are digitised – my 79-year-old aunt checks her banking app every day on her phone, pensioners book everything online and chat to friends on Facetime. Young people are interested in investing – look at the Gamestop phenomenon. Sustainability is not a fad and investors will demand to know if their money is being funnelled into the very things they strive to avoid.

Your brand may be important, but if you are not providing what people want, it will count for nothing. 

Your audience is changing. Your clientele are not who they were even ten years ago. Those who think the biggest challenge to their business is whether markets move against portfolio positions or regulators get tough on carbon are in for a shock.  

If, for the funds sector, Covid has been an operational inconvenience, the challenge ahead is existential. The future is going to be much harder to shape, envisage and model, as each organisation will have to choose how to meet clients’ needs.

It’s time to look at things differently. I look forward to seeing what comes next – and giving my opinion on it.

By Liz Pfeuti

© 2021 funds europe



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