Asset growth: Four ways administrators can help asset managers
As we all know, there is no silver bullet to raising assets or asset growth. Asset managers need to be executing on all fronts. However, the biggest challenges are often seen on the middle to small end of the market where firms don’t have the internal resources to dedicate to their marketing and sales efforts.
Identifying these challenges, and then working with business partners who can help provide services and tools to effectively address these, can help asset managers tackle these issues and address asset growth head on.
Address Product Pain Points
The product challenge is generally centered on the continual downward pressure on fees the industry is facing. Lower-cost and competitively priced products are winning in the marketplace. Surrounding all of this is an ongoing struggle for market share between active and passive investing solutions. Asset managers are trying to figure out how to price their products and rationalize product lineups in order to remain competitive and relevant.
Decide How to Sell
Depending on the size of the firm, asset managers are also facing decisions on how they are going to sell their products and what approach they are going to take. At some point, firms determine they need to make a difficult decision to either hire or outsource sales help to continue to grow their business. That cost commitment can be a difficult one to make and finding talent in a competitive space can be even more challenging.
Asset Growth: Move Beyond Mass Marketing
On the marketing side, the challenge is to break through the clutter and be heard by your target market with an often-limited budget. It is critical to try to narrow the marketing funnel. This requires targeted marketing efforts for the type of person who would buy your product. On the retail mass market side, utilizing digital marketing and SEO in order to improve targeting and stretch marketing dollars is beneficial in this effort. It is also critical to recognize the need for a customized strategy that begins with creating compelling content to educate the sophisticated institutional buyer about your investment process – an initial investment that could make a tremendous difference in reaching much larger pools of assets.
Determine Distribution Strategy
Ultimately, distribution challenges are best addressed through a strong channel strategy. What channels are realistic to target? Product shelf space is shrinking. It is imperative to offer the right product in the right vehicles at the right price in the right channels. It is not possible to be all things to all people. It is important to critically look at each distribution channel and the realistic opportunity for inclusion, whether that be through sophisticated institutional investors, RIAs, independent/regional B/D’s, wirehouses, or supermarket platforms.
Administrators have an opportunity to extend their services and partnerships to bring more distribution support to the forefront of asset growth. Working with a partner that is proactively identifying future trends impacting the industry and evolving its offerings to address these changes can help asset managers further grow their business.
Get more perspectives and insights from UMB Fund Services by reading the following articles:
Or learn more about UMB Fund Services and how we’re helping our retail and institutional clients address these issues.
Karen Fay Luedtke