The message is the same in almost every department across the asset management industry. Talk to those working in Investment, Distribution or Product Development. Talk to those sitting on the Board. Everyone will say the same thing: customer experience is critical if you’re to achieve sustainable success within the sector.
Departments across the industry also agree that technological implementation and engagement is now a crucial part of the contemporary customer experience. At the ‘2019 Horizons Future of Fund Management’ conference, Lucy MacDonald (Managing Director, Chief Investment Officer Global Equities, Allianz Global Investors) remarked: ‘We are in a post digital age. We have moved from businesses, which digitize their own products to moving to new ways of interacting with their customers. We are aiming for lifetime interaction with their customers.’
Tighter margins, lowered barriers of entry and a concentration of assets at the very top of the asset management industry mean that competition is stronger than ever. In fact, a recent study run by Willis Towers Watson (a pension schemes trustee service) indicated that the world’s 100 biggest asset owners now account for nearly 35% of the capital in the market. Managers must find a way to stand out from the crowd.
One of the ways that asset managers are looking to hone their brand, and encourage customer loyalty, is by creating personalised partnerships with their clients. For Andreas Utermann, CEO and Global CIO of Allianz Global Investors, the notion of a ‘client partnership’ is now one of the most important business strategies at AGI: ‘The way that we’re thinking about differentiating ourselves is by being very attentive to client needs and making sure that the relationship with the client is a partnership. We need to move away from a fixed fee arrangement to more of sharing values.’
The customer is also beginning to play an increasingly central role in Product Development. Silvana Pacitti, Head of Global Product Strategy at Allianz Global Investors, believes that Product Development in asset management has shifted from an operational to a strategical enterprise. Furthermore, customer needs are now at the heart of those strategical conversations: ‘The client has to be at the heart of everything we do. For any new product development process, we have to understand how our product will fit our clients’ needs. That starts with talking to them about their problems and ideas.’
Hanneke Smits – Chief Executive Officer at Newton Investment Management (a subsidiary of BNY Mellon Investments) – says that customer needs, and the way that technology might be used to help meet those needs, have been driving board-level dialogue for a number of years: ‘Board discussions have been much more about how we engage with the end client better and how we can help investment teams use technology to make better decisions.’
But even with the right technology in place, stagnation and silo mentality can still set in. John Kitchingman (Managing Director, Northern Europe Dassault Systèmes) explains how an initial enthusiasm for technological innovation is not enough: ‘I see countless digital strategies being defined but without the organisational construct to deliver.’ Kitchingman adds that without ‘cross business sponsorship’ and a willingness to embed technological solutions across the business, the necessary collaboration and customer-led collaboration will simply not be possible.
Customer needs are changing, and only those companies willing to meet those needs, with the help of technological innovation, will be able to stay competitive. John Stainsby, Head of UK Client Group, AXA Investment Managers, sums up: ‘Our industry is all about change. Markets change. Clients change. Their needs change. We need to change with them.’
All quotations are pulled from a series of debates that took place at the 20th annual ‘Horizons: Future of Fund Management’ conference.