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Worlds Are Colliding!

By Kira Benson

This may be one of my favorite Seinfeld quotes, but it has also been the theme in asset management over the last several years as the institutional and retail markets have begun to veer away from distinct boxes and have started “blurring boundaries.”


Colliding Worlds

A couple of factors have been big drivers of this change: the rise of the “retail consultant” and model investing as many intermediary firms have begun to institutionalize their investment processes, and the convergence of investment strategies used by both the institutional and retail markets.

As the number of investment advice shops and platforms has risen, warehouses and RIAs have looked for better ways to differentiate themselves. There has also been a heightened awareness of potential conflicts of interest over the last several years and a greater focus on due diligence and research. Partnerships with well-known consultants have enabled firms to address these concerns and to offer an institutionally driven portfolio construction process to their clients. Likewise, in recent years the retail market has also become a welcome revenue source for consultants who have had their fees relentlessly compressed in the institutional space. As the trend of the “retail consultant” continues, and as the investment process becomes more “institutional” in the retail space with model investing, asset managers will increasingly see less distinction between the institutional and retail markets.

Over the last several years, there has been a sharp increase in retail investor interest in alternative strategies. This has resulted in an increase of offerings and downward fee pressure as the alternatives market has become more mainstream. Index-tracking ETFs are also increasingly used as an investment tool by the institutional market who have found them to be an efficient and effective way to execute investment strategies or to park assets that can be quickly liquidated to meet obligations. With the unprecedented availability of information and investment offerings, increased transparency and cognizance of fees across all investor types, the historical notion of certain investment strategies pertaining only to specific investor classes is becoming more antiquated.


Same Universe – Different Dimensions

Given that the institutional and retail markets are no longer distinctly defined, it makes sense for asset managers to view all of their lines of business, distributional channels, investors, along with consultants, on one enterprise-wide platform to be able to more quickly and easily identify new business opportunities versus having to navigate multiple disparate systems each with their own data access and reporting limitations.

An enterprise-wide analytics and distribution reporting platform will aggregate the entire universe of data for all business channels and all product types to provide a full 360-degree view of the business.  This approach will allow the asset management firm to “slice and dice” its data in a multitude of ways to provide different dimensional views of the data to quickly identify new business insights as well as quickly adapt to business changes necessitated by a changing asset management landscape.

The insights gleaned in the sales analytics and distribution platform need to be effectively shared with the Sales and Marketing teams to turn the opportunities into new business.  Typically, the way this information is disseminated is through the firm’s CRM system.    A real-time two-way integration between the firm’s CRM system and its Sales Analytics and Distribution Reporting system will ensure the data is timely and accurate, including Rep prospects and Advisor teams, so the sales and marketing teams can trust that the data they are using will help them to close more business more quickly.


Growing Sales and Retaining Assets

Industry convergence and consolidation, across the investor base as well as across asset managers and distributors’ offerings, have made targeted and “smarter” distribution efforts and marketing campaigns, backed by analytics, even more important. While the Retail and Institutional markets continue to collide, merge and change it’s important for asset managers to have the right Sales Analytics and Distribution Reporting platform in place to readily adapt to the new landscape and to continue to focus on the business relationships that are most likely to result in growing sales and retaining assets.


Kira Benson is Director of Business Development at MARS SalesFocus Solutions. Previously Kira worked at BlackRock, BlueBay Asset Management, and Graystone Consulting (Morgan Stanley).