Fund companies are planning increased expenditures on distribution this year with technology being a driving factor. A majority of fund managers (58%) indicated in a Money Management Executive survey that they are planning to boost technology spending for distribution efforts this year. The areas of planned technology surges are led by client communication (73%), analytics (57%), social media/marketing (43%) and compliance (38%). Forty-six percent of the asset managers who took part in Money Management Executive's survey say they plan on spending more on distribution this year compared to last year. When asked what areas firms will be making distribution-related expenditures in, technology (40%) ranked tops followed by compliance (25%) and salesforce management software (25%).
AdvisorShares, one of the largest issuers of actively managed ETFs, began focusing heavily on technology for its distribution strategy upon launching in October 2008 and is looking to add continued enhancements to its platforms this year while also boosting staff. The ETF provider uses a cloud-based approach for its customer relationship management system and email marketing automation strategy. "We've taken a cloud-based approach to all things we do distribution wise," says James Carl, managing director of sales for AdvisorShares. "As a new firm, technology is our best investment."