2021: The Year a-head for Asset Management – Changing Culture & Competitive Advantages

04 Feb 2021

Part 3 of our series on 2021 examines several trends that will shape the culture and competitive landscape for asset managers. While some of these trends are driven by the need to adapt to the pandemic, many of the changes hold long-term benefits.

Let’s dive in. 

Shifting Investment Culture

Pandemic is fundamentally shifting investing culture. Work-From-Home is here to stay for asset management firms and their clients. This changes how firms collaborate and communicate inside and outside of their walls. It also accelerates the key globalization trends that have been ongoing for the past decade. 

For asset managers, there are opportunities in these changes. Now, being in Manhattan isn’t important.  Talent diversity, ability to communicate, and of course performance will win out over geographic location. When all asset managers compete on equal footing in terms of location, competition increases, and the industry gets stronger.

Firms located in low cost-of-living areas are best positioned to take advantage of these shifts and compete with the larger, more established firms. 

Small but Mighty

The effects of the pandemic and modifications to ways of doing business will create increased competition and will benefit those firms that are able to adjust rapidly.  While size isn’t always an indicator of adaptability, smaller or more technologically advanced firms could have a distinct competitive advantage if they are ready.

Scale will not matter as much as the level of sophistication seen in investing and communication. Clients will continue to expect that small to mid-sized firms have the same tools, insights, and responsiveness as the larger firms on Wall Street.  The good news is advances in technology, such as cloud and automation, make it possible for smaller firms to “swing above their tier.”

In turn, this heightened competitive environment may force some of the more established firms or those that are slower to adopt new technology and practices to change habits and broaden their horizons in terms of tech and culture.   

Changing Roles

Finally, we expect that 2021 will see an increased focus on cross-training duties and responsibilities within firms. The blurring of the lines between client/sales/digital personnel will continue. As a result, teams will be more integrated and holistic in their approach to client service. 

How do you think asset management culture will change this year?