Financial services firms' 2014 plans center on product lines, distribution capabilities and technology, according to a survey done by Cerulli Associates.

"Most companies are operating on overdrive as they seek to expand and grow their businesses, while maintaining an eye on the bottom line," says Cindy Erickson Zarker, director at Cerulli Associates.

Fund managers are taking a more pragmatic approach to product development activities, according to the survey done by Cerulli Associates. Firms are generally raising product development budgets only moderately and many product groups that were interviewed by Cerulli are focusing their attention on building assets in recently launched products. 

For example, managers are focused on packaging multistrategy and other nontraditional fixed-income investments to meet advisor demand for income-generating products, Cerulli found. 

According to the survey, 46% of asset managers plan to launch one to three new products during the next year; only 13% of firms reported that they plan to launch more than six in the next 12 months. 

When designing, positioning and establishing new products, fund managers need to be aware of how their clients view risk, Cerulli Associates warns. The group found that advisors believe 23% of their clients have an aggressive risk profile -- but only 5% of their clients agree with that assessment. Cerulli encourages advisors to maximize their impact beyond product rationalization and take a more pragmatic approach, such as the use of technology.


Another key area for firms was technology investment, the report found.

"Nearly 30% of survey respondents rated investment in technology as a desired outcome of planned organizational changes at their firms," Zarker says.

Firms need to be embracing technology to reach new audiences, Cerulli found. 

Firms are also changing their approach to social media, the report found. During 2013, U.S. asset managers ranked expanding digital marketing efforts as their second-largest challenge behind supporting distribution efforts, and this task remains a challenge.

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