© 2020 Arizent. All rights reserved.

5 ways asset managers may use data to build relationships

Register now

Asset managers may derive as much as 80% to 90% of their sales from just a few key national accounts. Managing these accounts is therefore critically important. They rely heavily on the distribution efforts of their key accounts, so in order to grow assets under management, national accounts team must effectively serve as the gatekeepers of your client's platforms.

It's no secret that key employees evaluate their relationships on a continuous basis, and many are reducing the number of managers on their platforms. In addition, distributors may be demanding more support in the areas of investor education, risk management and governance.

The data provided is used to analyze the profitability of product offerings and their demand. Timely and accurate data is a tool that asset managers can use to build key account relationships and compete for new business, and help provide value to the customer.

Asset managers should consider these approaches for using data to serve their most important accounts:

Recent market volatility may have tested the resilience of key account products and models. Clients need asset managers to be a powerful source of information. They can differentiate from the competition by becoming a strategic business partner.

Providing a strategic partner role for key accounts requires asset managers to provide a level of information that is more in-depth than simply investment performance. If clients want input on developing a new product or changing the marketing direction of a particular fund, managers need to provide the right data.

Assume managers provide data that explains the impact of market volatility on a particular asset class. In-depth analysis reveals that volatility is less of a factor on the asset class than previously thought, which supports the client's decision to change the marketing direction of a fund they distribute.

Adding value as a strategic partner can help maintain profitability with key accounts.

BDs and RIAs are placing more emphasis on model-based investing, an approach that requires managers to shift resources to the home office. The growth in model-based investing means your clients will increase the number of analysts and product development experts, and firms must adjust.

"By moving up the value chain and rolling out such services as research, model portfolios manufactured through cost-effective ETFs, structured customized solutions and financial planning, distributors can fully leverage their ownership of the client relationship," an EY survey says.

Fees were nearly half the price of the top-performing active funds.
September 4

Firms must meet the diverse needs of their clients' growing staff of researchers and analysts, and their systems must be able to quickly collect and distribute data for home office marketers, portfolio managers and analysts.

In a 2018 report, Deloitte said firms "are expected to face margin compression as investors favor low-cost investment solutions."

Researchers and analysts need comparative data on fund fees, expenses, trading cost and performance metrics in order to make the case for alpha. Data systems and analysis must be able to meet that client need.

Asset managers should discuss each type of report for key account analysts and determine the reports that are not useful for clients. If unneeded reports are cut, both the manager and client will save time and money.

Consultants are "increasingly offering services that are highly overlapping and similar to asset managers," EY said. Consultants may be helping key accounts with portfolio construction, asset allocation and due diligence.

To maintain relationships with key accounts, national accounts teams must coordinate with consultant relationship teams. Both must provide accurate data to deliver a consistent message to both consultants and key account staff.

National accounts and consultant relationship teams should meet frequently to discuss the priorities for your key accounts, and rank those priorities so both parties are served effectively. If consultants view benchmarking data as a top priority, the consultant may need more-frequent information on benchmark performance data than clients.

Revenue growth may be driven by a small number of key account relationships, and firms must properly equip their national accounts teams. That support may move a variety of resources to national accounts teams. These additional resources can help address a diverse set of key account needs.

Distributors want the ability to drive new sales with data-driven marketing, and national account teams must be able to support that effort. Data can help you clearly understand the needs of your key account team, and offer solutions tailored to the needs of the home office. Asset managers must provide resources to areas that provide the largest potential for revenue growth, and providing useful data is a valuable resource.

For reprint and licensing requests for this article, click here.