[In a year of much change, competitive threats and uncertainty in the asset management industry, I found these notes from a wide range of industry discussions and perspectives to be a sobering and informative overview on important industry trends. Coming from different vantage points, they paint a good picture on how the industry is evolving.]

At The Investment Company Institute (ICI) General Membership Meeting (May 1-4, 2019)

To open this year’s ICI conference — the leading association representing regulated funds globally — Yie-Hsin Hung, chair, GMM Planning Committee and CEO, New York Life Investment Management laid out in her address this year’s GMM Conference focus on the fund industry’s biggest issues —three fundamental shifts that are redefining how we do business and the questions we face in navigating these shifts”:

1. Surging Industry Competition Delivers for Investors, but Firms Face a New Reality — With today’s hyper-competition, fund complexes have launched a wide range of new products and services to meet the evolving needs of investors—delivering those products and increased services at lower and lower cost. Investors also want simpler and more comprehensive information about their investments—and easier 24/7 access to that information. This competition has opened up some big questions as well.

Questions to address: As more fund complexes develop similar products at lower costs, how do they separate themselves from the pack?  How do they make their product the one that people want to buy? As more intermediaries move from commission-based models to fee-based advice—in anticipation of the SEC’s Regulation Best Interest—they’re trimming their product lines. What can fund complexes do to keep their products on these shrinking shelves?

2. A Sound Technology Strategy Is Critical, but Technology Is Only the Beginning — As fund firms work to incorporate the new technologies around big data, artificial intelligence, machine learning, robotics, blockchain , FinTech, and cybersecurity into their firms, a cautionary warning was given to remember that technology alone won’t get firms all that far. “If we’re going to transform tech’s tremendous power into better outcomes for investors, we must be ready to negotiate the many new complexities along the way. How firms negotiate and incorporate these new complexities is open for intense debate. But no matter the specific approach, a healthy dose of patience and perseverance—along with an open mind—was recommended.

3. Global Thinking Was Once an Option, but Now Is a Necessity — The greatest industry risk in foreign markets today is to ignore these markets. It’s a huge opportunity, but one with obstacles to overcome like traversing this fragmented landscape and many Byzantine bureaucratic hierarchies and unfamiliar governance structures.

George C. W. Gatch, CEO, Global Funds Management and Institutional, J.P. Morgan Asset Management, continued the theme in his address: “It could not have been clearer that for our funds, for our investors, for our industry—globalization is an unstoppable trend. These trends will create new opportunities for fund investing. They will also place new demands on our firms, our people, our business models, and our relations with regulators.”                                                      …………………………………………………………………….

At The Ultimus Fund Solutions Client Conference (September 18-21, 2019)

Ultimus Fund Solutions — one of the largest, independent mutual fund services and middle-office technology providers for RIAs in the country - dedicated their 2019 conference for their asset management clients to the theme of Vision 20/20 and provided forward looking perspectives throughout the event. Bob Dorsey, CEO and managing director of Ultimus, articulated the need for asset management firms to develop and actualize a strategic vision for their firms in order to grow in this very competitive business environment.

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