Planners concerned about their asset managers need to check their managers’ business models against five successful ones.

There are five types of asset managment firms that outperform the markets, according to the lead author of a new study by Accenture, a global consulting firm

“If you are a financial planner and thinking about where you want to invest your time and your client’s money, you want to be thinking not only about a certain fund or a certain sector but who are the high-performance asset managing firms, not only for today but for the future,” said Kevin Boyle, a managing director of Accenture Wealth and Asset Management Services, who was the study's lead author.


The study examined “high performers over the last five years and how [their strategies] match up with changes taking place in the market,” Boyle said. Analyzing asset managers is more important now than ever because, the study said, in the wake of the financial crisis, many asset managers continue to struggle with low profitability that puts them at risk to underperform.

Commonalities to each of the business models identified by the study, according to Boyle, include: clear strategies, resources aligned strongly around those strategies and a conviction among firm leadership that they can successfully execute them.

“Planners only have so many hours in the day,” Boyle said. “So, [they need to consider] which managers do they really want to spend their times learning, getting close to and spending time advising their clients about.”

The study found that planners should seek asset managers that are:

  1. Global solutions providers. These firms excel in managing across geographic boundaries to leverage product, channel and service capabilities. They use their sizable assets under management and profitability increases to support further investments: creating innovative products and solutions, developing talent and technology, and increasing market penetration through merger and acquisition activity. Examples: BlackRock and PIMCO.
  2. Focused alpha factories. These firms are alternative investment managers, defined by typically flat organizations and a near-total focus on investment performance. They are usually independent from bank or insurance company holding structures, helping keep down overall compliance costs. Examples: Blackstone and many privately held boutique fund managers.
  3. Client experience champions. These firms make anticipatory investments in client relationship management, retirement products and platforms, and integrated multi-channel distribution. They feature strong capabilities in data management and analytics to serve both financial advisors and their clients. Examples: Franklin Templeton and T. Rowe Price.
  4. Enterprise value creators. These firms leverage their corporate infrastructure while adding value to banking and insurance relationships. They cross sell efficiently thanks to investments in expanded offerings, in building a national or global brand, and in optimizing operations, as well as in client-relationship management systems and analytics. Examples: Allianz/PIMCO and J.P Morgan Asset Management.
  5. Emerging markets leaders: Using a relatively new high-performance model, these firms build on local relationships and distribution channels to capture large shares in emerging markets. They invest in technology as well as marketing, sales and distribution to bring the right products to their markets. Examples: Banco Itau and Ping An.

Planners might want to consider if their current asset managers don’t fall into one of these five camps, Boyle said.
“There might be some firms where you would say, ‘Hmm their strategy seems a little bit muddled, I can’t line them up clearly with one of these models,’” he said. “Or maybe they are trying to be something that they are really not capable of being.”

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