New York-based research and consulting firm Kasina was co-founded by Steven Miyao and Lee Kowarski in 1999 on the premise of challenging conventional wisdom in the asset management industry by "asking the tough questions" and "developing unexplored opportunities for companies in need of strategy overhauls."
Thirteen years later, the firm counts some 70 fund firms representing some $8 trillion in assets under management as clients, according to Miyao. Money Management Executive recently spoke to Miyao about the firm's growth initiatives and about how it thinks fund firms can stay ahead of its competition in an increasingly competitive mutual fund landscape.
So you've recently made a new hire in Bob Fenster as a product manager to help grow Kasina's benchmarking offerings. Can you talk about that a bit?
Miyao: Bob's hire was really to expand on a product (Digital Platforms) we introduced last year to help firms understand how their digital metrics compared to other companies' digital metrics and how their sales activities compared to other companies' and really give them an understanding of how productive their employees are.
So Bob's hire is to make those products deliverable in a digital format. A lot of companies are putting out digital dashboards now and we wanted to push the envelope to give asset managers and insurers an easy way to quickly see how they're performing online, how their wholesalers are performing compared to their competition.
You also have a new research out on big data that says distribution and marketing managers are starting to use data in their day-to-day decision-making and interaction with clients. What was the basis of the research?
Miyao: A decade ago, when we wrote a paper entitled "Intelligent Distribution," we began speaking to our clients about how they can utilize data to better understand business and direct their resources. We continue to write about this and analyze this within our client base to help firms successfully start on that endeavor.
The core challenge that a lot of organizations have is that culturally, they're not quite there in wanting to understand what the data says so that it can guide their directions.
Often, the technology is already in place for firms to take advantage of all of their data. They get data from their website, from their email systems, from their sales force in the (customer relationship management system), and more.
The problem is all of the data in most organizations are not tied together, so it's hard to utilize the data holistically. Companies like Franklin Templeton have a group of analysts working with the wholesalers to optimize the sale process. The same is true for Fidelity Investments and Invesco.
We just published another study, "Progressing from Analytics to Action for Data-Driven Firms," that helps firms tackle that problem specifically: helping them move from storing all of this data and analytics to truly having that data drive actions.
What else do you have cooking?
In 2012, we began providing our clients with a product called Product Strategy Compass where we offer insights on product trends across a range of investment product categories, including liquid alternatives, annuities, exchange-traded funds, collective investment trusts, and managed accounts.
Clients value this service because there's nothing like it in the market. Most product information in the market is backward-looking and we are focusing on emerging trends that clients need to be developing for. Product development, product management, and marketing people are interested in this and finding it really valuable.
What are your views on ETFs and alternative funds?
ETFs are an important part of the industry and any large-scale player needs to be able to provide ETF services. One of the core things that we offer to our ETF clients is we survey around 3,000 advisors and we asked them about behaviors as well as preferences they have in regards to investment products, and one of the main themes that we look at is how they use ETFs. We also benchmark the ETF players against each other from a productivity standpoint and those key elements enable us to do a lot of consulting with those ETF players.
Broker dealers are recommending approximately a 20% allocation to alternative investments that can be anything from a commodity fund to a REIT product to a hedge fund-like long/short product. But what you see is advisors' assets at only about 5% in alternatives. The reason for that gap is the lack of understanding of these kinds of products in the advisor community. Products with the most assets in the alternative category is (real estate investment trusts) because they're what people understand the most. It's real estate.
How does Kasina compare with other research firms such as Strategic Insight and FUSE Research Network?
We are unique in the industry in that we give our clients a holistic view of the market through our data, research and consulting services: competitor trends, client trends, and product trends. We are able to provide actionable insights across a clients' entire organization. The more time that I spend in this industry, the more I understand how important it is to provide a full suite of solutions, and not just tackle disparate parts of the organization. That's why we form such deep relationships with our clients.