Four Themes to Watch in Asset Management Distribution


Share on LinkedIn

Recently, Jeff Zamiska and I attended the 54th Annual Investment Company Institute General Membership Meeting (ICI –GMM.) I have personally attended the ICI conference on many occasions, but this was our first time as a sponsor.

Since 2010, ICI has held three major events concurrently with the General Membership Meeting: the Mutual Fund Compliance Programs Conference, the Operations and Technology Conference, and IDC’s Investment Company Directors Workshop. Of particular interest to us were the sessions on asset management distribution where we overheard a few overarching themes.

1. Big Data Analytics for Distribution Excellence

Dwight D. Jacobsen of Dreyfus Investments led a breakfast session entitled Distribution’s New Priorities. The over-arching theme of the session was the search for what kasina’s Steven Miyao refers to as “distribution alpha.” In the same way that asset managers search for alpha, or performance above market, distributors are now seeking to out-distribute their peers. Big data, social networking, and segmentation were mentioned by several participants, and most had, at minimal, a technical segmentation of their advisor universe. We were glad to hear that distribution professionals are keen to use analytical, data-based approaches to achieve distribution excellence as this validates our work in the asset management industry.

2. The Wholesaler Compensation Debate

Another major theme was the use of compensation plans with a net sales-based component. On this topic there was far less agreement; asset managers are just as likely to use a high or low nest sales weight in their wholesaler compensation. During the session, an audience member who previously headed distribution for a large asset manager remarked to me that he had heard the same conversation several years earlier.

3. Fund Distribution: Evolving Challenges and Complexities

On Thursday afternoon, Bob Cunha of Market Metrics moderated a joint session for the General Membership Meeting and Operations and Technology Conference entitled “Fund Distribution: Evolving Challenges and Complexities.” This session explored the transition to fee-based advisory programs, trends in product development and the use of social media.

  • A large chunk of the discussion was on the increasing use of the Rep as a portfolio manager platform. This has caused significant increases in the transactional rate of advisors and some argued is resulting in increased volatility.
  • Exchange-traded funds (ETFs): Cunha raised the concern that ETFs might cannibalize a large chunk of the traditional mutual fund business. Paul Hatch of Morgan Stanley Smith Barney said that he did not see that happening. Although ETFs have grown rapidly, they still represent less than 10% of the market.
  • Social Media for Asset Management: Paul Hatch maintained that the social media revolution is going to have a major effect on asset management, and other panelists agreed. Scott A. Curtis of Raymond James Financial Services said that in his business, even the most connected advisors barely scratch the surface in terms of its use as an outbound marketing platform. Bill Dwyer of LPL Financial Services emphasized the requirement that leveraging content appropriate to the medium was an important challenge. Social media was also discussed at length in a breakfast session “Social Media Opportunities and Challenges“, led by Alexander Gavis from Fidelity Investments. Social media has become a hot topic in asset management.
4. CRM Transformation

From the many conversations we had, almost half the firms were looking at updating existing CRM systems and the majority were considering hosted systems, particularly Most also mentioned that they aim to leverage internal and external data to drive sales performance.

Apart from the sessions themselves, the conference was a great opportunity for us to re-acquaint ourselves with old friends and customers alike, as well as connect with new people who are seeking to drive distribution success.

If you were at the conference but didn’t have a chance to talk with us, please drop us a note — we’d love to hear from you.

Republished with author's permission from original post.

Ian J. Scott
Dr. Ian J. Scott is the VP of Customer Solutions for Lattice Engines. Prior to that, Ian served as CTO for Angoss. During his career, he has conducted quantitative risk assessment for UBS and also worked for CFM, a Paris-based hedge fund. Dr. Scott holds a Ph.D. in Physics from Harvard and a B.Sc. from McGill.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here