Interestingly, as we dug down into the components of distribution enablement in the balance of the survey, significant gaps between the importance of certain capabilities and their current level of performance emerged.
Candidly, I’d say that the sum of the parts didn’t actually seem to add up to the whole. Perhaps a strong market and significant increases in AUM for many “influenced” their perception of their current capabilities. A rising tide floats all boats.
We were reviewing the report with the head of distribution from a large firm (>$1T) earlier this week. He was comparing it with research they had just completed with advisors. While it was mostly consistent, he summarized the advisor point of view a bit differently—“Our expectations for asset managers are low, and you met them.”
Our hope is that the industry will in fact take advantage of this opportunity to truly transform how they work with their clients. No doubt some will, and some won’t, but it does begin with an honest assessment of where you are today.
Hortz: What has your research revealed as to the biggest challenges asset management firms face in this current environment?
Sheldon: We probed in detail across a number of distribution enablement components and asked for top challenges in each area. There was a good deal of consistency in the top challenges across the industry. We also looked at it by firm size to see how the challenges varied based on AUM. While the challenges were similar, their relative prioritization varied―most of which we believe can be attributed to operational scale.
Here are some of the highlights:
“Improving business agility and keeping up with changes in the market” was a top three challenge almost universally, regardless of size. We suspect this was exacerbated by the sudden shifts resulting from the pandemic, but it highlights the need for greater customer-centricity and agility moving forward.
Alignment between sales, marketing and service is a top issue for most firms and will be a focus for many moving forward. Most firms still run enablement out of the sales/distribution teams and are often disconnected from the marketing teams. Gaining alignment across marketing, sales, service, and product will be critical moving forward.
Tools and technology and data and measurement were both highlighted as extremely important to success by 90% of the respondents, but there was a big gap in terms of current performance in these two critical areas. 50% of respondents indicated their performance here was below average.
“Influencing seller behavior through the delivery of advisor insights” interestingly continues as a major challenge for firms—regardless of size. Despite increased investment in technology, data and analytics and advisor insight, getting salespeople to actually change their call patterns is still a challenge. (P.S., this is not unique to asset management!)
Lastly, we saw some big gaps between the types of support financial advisors view as important, and asset managers’ performance in delivering that support. End-client facing content and education content for advisors were two of the biggest gaps identified.