A white paper published by CaseyQuirk explores how technology will reshape asset managers’ sales set-up (for both retail and institutional markets). This article proposes an abstract of the study and highlights the concrete outputs & features that a new distribution model can bring to clients and asset managers.
Worldwide, asset managers spent an estimated $2.2 billion on distribution-related technology in 2017, representing a median allocation of 6.5% of distribution costs. However, the study points out that most asset managers are underequipped for digital distribution technology and suffered from many sources of sales inefficiency as shown below. Particularly, few AM are able to provide a single view of a client across the company.
Distribution technology should be one element of the overall distribution strategy, which aims at linking existing sales & service capabilities with client needs. Effectively deployed, it usually consists of three critical layers:
1. Client data, best held in an integrated data repository that unifies client, prospect, and competitive information from (often-disparate) proprietary and 3rd party sources. Outputs include sales-team activity metrics, client portfolio information, account activity, CRM notes & client satisfaction metrics.
2. A client analytics engine: algorithms that process large sets of data in order to generate insights regarding client needs and preferences. Outputs from the analytics engine allow sales team to segment and analyze client data (including predictive or behavioral models) finding new prospects & expanding existing relationships.
3. Client experience applications that allow distribution professionals to use analytics to improve customer experience across multiple functions with mass-customized services & better reactivity (RFP & DDQ automation, personalized emailing, modular & interactive reporting, tailored market commentary, etc.).
The efficiency impact of each of the three layers are deemed very positive (double-digit in productivity or profitability metrics growth). Nevertheless, few asset managers have built any of these three layers completely, according to the research firm.
Digital capabilities will be key to improve asset managers’ distribution efficiency & transform a products transactions engagement model into a continuous relationship.
In addition, “Distribution 2.0” technology can blend the ‘sophisticated’ content effective in institutional relationship management with the mass customization delivery mechanisms of the retail world, permitting to deliver more customized and service-oriented client experience at scale to buyers regardless of their size.
Author: Eddy Arnaud - December 2019
