Price, Product Management, Service and Technology Key, Survey Says
In the growing competition for global pension and retirement assets, managers can benefit from market volatility by competing on price, product management, service and technological capabilities, according to a new study by Meridian Research of Newton, Mass.
Asset managers that can offer products with decent performance may be able to compete with other managers with similarly focused products and comparable performance by lowering the product's expense ratio. By lowering a large pension fund's price by as little as 10 basis points, a manager can significantly impact a fund's short-term and long-term performance, according to the study.
Also, as sinking markets further diminishes pension assets, managers need to diversify their product offerings in order to attract new assets, according to the study. By adding fixed income, real estate and alternative investment products, managers can draw pension funds that are increasingly seeking investment options in these types of products.
Offering a strong service model can also help portfolio managers retain and service clients, especially high-net-worth investors, according to the study. Tools that help calculate rate-of-return and provide a channel of online communication between the investor and the portfolio manager are useful tools in servicing that market.
Technology can also be used to gather and retain pension and retirement assets, according to the study. By providing comprehensive education program and an online financial planning and advisory tool, managers can assist employer-sponsored defined contribution participants, the study says. That can strengthen the relationship between the product provider and the participant, which is vital in retaining assets when the participant leaves or retires from the company.