Today I am kicking off a series of blog posts focused on 2021 trends that asset managers should be paying attention to as we enter the 21st year of the 21st century. Throughout the series, we will cover a variety of topics from technology trends to watch, to opportunities to take advantage of and trends that are here to stay.

To start, let’s take a look at the top 3 challenges that we predict will be a big part of 2021 for firms.

Fee Pressure

While this isn’t new for 2021, we believe it is still going to be a major factor for firms. Continued pressure to reduce fees and/or differentiate services will be prevalent throughout the year. As we begin to emerge from the pandemic, its long-term economic implications will begin to surface and add further pressure to reduce fees.  Turning to technology advances — digitization, cloud, and automation — can help firms tackle fee pressures by improving staff productivity, uncovering new insights from data, and delivering more timely and accurate communications to clients.

Risk Management

From the pandemic to political risks and reputation risks, there is a lot firms need to be continually assessing in 2021. While Political risks appear to be mostly receding, several are still outstanding such as the ongoing trade war with China, which could have sudden and drastic implications.  From social and economic impact to the human impact on our firms and the communities we live and operate in, the pandemic will continue to be a major force in our industry.   Careful monitoring and ongoing assessment of these global risks will be a mainstay of 2021.

Reputational risk has sometimes been an afterthought for firms. But for 2021 and beyond, that is no longer a viable option. With a growing focus on ESG from investors, firms must be aware of and carefully manage their reputation. Clear and engaging communications about responsible investing philosophy and gender and diversity representation will be needed to build a positive firm reputation and reinforce strong client relationships.

Cybersecurity

There are two broader trends playing out that ensure cybersecurity will be an ongoing technology challenge for firms. First, the shift to working from home requires that firms provide their team secure and seamless access to data and systems along with the ability to effectively collaborate. Second, the consolidation from a silo of vendors approach where each provides part of an overall solution, to a single vendor offering an integrated front-to-back solution is accelerating. Ensuring that these new vendors and their systems have the necessary security certification such as SOC2 is critical.

What challenges are you anticipating in 2021?