February 08, 2022

Key Trends 2022: Asset Management - Distribution

Distribution is ripe for change. Technology has fundamentally changed the way that Asset Managers engage with clients; through digital channels, handling client enquires through chatbots, more use of virtual meetings (thus cutting down on travel costs and lowering emissions) and providing customised reporting. A recent survey from Deloitte suggested that those firms who are “digitally advanced” and able to engage with clients in a succinct, speedy fashion, are in the best position for growth.

In light of this, distribution and technology teams need to be closely aligned to take advantage of this. Working in close proximity and symbiotically both teams need to think how best to engage with the client base, understanding what the customer is looking for and how best to respond to the changing landscape.

In order to make better use of technology the core infrastructure may need bringing up to speed. An often expensive and long-term process. Asset Managers can look for a quick fix whilst curating longer term solutions. One such solution is using third-party cloud-based asset servicing to enable a unified view of client’s data. This lowers the risk of implementing wholesale data changes whilst allowing faster response to clients and more efficient client engagement.

This is a monumental task and implementing wholesale change will require key communication skills from senior leadership. Managing talent through upskilling whilst these changes take place will also be of importance.

Geographically speaking, China provides a huge growth opportunity with the outsourced assets of pension funds in China expected to grow to circa $1trillion over the next five to eight years. Asset Managers may look to increase their foothold in the China market to win these assets. However, this presents regional problems with navigating the already complex China regulatory market.

Investment specialists are likely to be in high demand. Such individuals are able to bridge the gap between investment and distribution teams. However, a recent evolution will see them take more of a strategic and proactive approach to client engagement. They may also have a focus on a particular client base, the insurance segment is expected to be a key focus.

George Windsor, Head of Asset Management, Carlyle

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