Cerulli Associates says asset managers need to innovate to retain and win clients
With the prolonged era of low interest rates and asset growth having ended, asset managers will have to get creative to attract and retain clients in the years ahead.
A report from Cerulli Associates says that innovation will be key and looking outside narrow lanes will be the way to win in an increasingly competitive market.
“The mutual fund industry demonstrated resilience last year, achieving growth despite the volatile market environment,” says André Schnurrenberger, managing director, Europe at Cerulli Associates. “We believe the best opportunities for asset managers exist in specialist areas such as responsible investment and alternatives, as well as the wealth management channel.”
The firm’s analysis has seen several trends including, in the US, demand for actively managed ETFs including mutual fund conversions, while Hong Kong has seen an increased focus on ETFs centred on virtual assets such as technology and ESG.
Cerulli believes there is scope for innovation in ESG and alternatives, particularly in the high-net-worth (HNW) segment in some major markets, notably Singapore.
“Climate and environment-themed funds have so far dominated ESG product development, but we are seeing plenty of activity in impact investing,” added Schnurrenberger.
Standing out
One issue the industry has is that it’s often hard to differentiate between the many investment products available.
The report says that asset managers need to deliver more solutions across a broader range of vehicle structures and provide scalable solutions that can be customized at the individual investor level.
This will require those businesses that have been built on the mutual funds structure for many decades to decide which way to pivot their offerings to retain assets.
The full report – Global Markets 2023: A Changing World – is available at cerulli.com
