It wouldn’t be fair to talk about the challenges 2021 will bring without giving equal airtime to the opportunities that will also emerge or strengthen this year. The second post in our 2021 Trends series examines 3 key opportunities that firms can take advantage of this year.
Attracting New Clients – Market Navigation & Differentiated Services
With Treasuries at their lowest yields ever, investors, especially high dollar clients with exacting mandates, are seeking yield in uncertain markets. While asset managers can always attract more clients if they can successfully navigate the market, current conditions may make it even easier to differentiate through careful asset/security selection.
Additionally, firms that have adopted a more modern approach to how they use their data will also be able to differentiate their services, making it easier for clients to work and engage with the asset manager. This carries significant implications for small-to-medium–sized asset managers who with the right technology could leap-frog the bigger ones through enhanced client engagement.
Environmental, Social and Governance Investing
Responsible investing emerged as a key theme of 2020 and will continue to play a major role in 2021. While firms must adapt their strategies to respond to this new client requirement, it is equally important that can and are communicating clearly about their approach through client reports, pitch books, and factsheets. New sources of data on diversity representation and the ability to track ESG data are essential. But to take full advantage of this trend, firms must be ready with effective clients, sales, and digital communication tools.
The time has come for the automation and digitization of time-consuming tasks such as the quarter-end crunch, updating GIPS reports or cutting and pasting data into pitch books. Firms that have not modernized their approach to data are already behind the curve in client, sales, and digital communications. How far behind they fall will depend on their willingness to adopt new technologies. Reducing inefficiencies and boosting team productivity is now essential for firms looking to take advantage of the opportunities 2021 will bring.
What opportunities are you most looking forward to going after this year?