Are you planning an extraordinary digital channel for your brand, or another vanity website?
During 2013 we’ve given a lot of airtime to user experience and the power of making digital journeys simple, intuitive and fast. We fight hard to help people understand that the “vanity” element of this is actually what’s least important.
What’s important is how digital experiences will help shape the future for asset managers, new and old. We think digital is a key battleground in the turf war that is currently engulfing global asset management.
Here in the UK, the Retail Distribution Review
has given us a lens on what regulatory change can do to disrupt distribution models. In the US, a battle of the brands is underway to see who will emerge triumphant when it comes to cross-border sales into Europe and beyond that, Asia.
There are some pretty straightforward conclusions to draw from asset management’s recent history. We think they all reinforce the need for fund managers to re-think how to position their brand within an evolving, changing asset distribution model and we strongly believe that the digital channel has a significant role to play.
Focusing purely on retail and advisor based sales, here’s my 2014 watchlist.
Mirror, mirror, on the wall. What does 2014 hold for us all?
We’ll stop selling funds and focus on solutions.
These solutions will be risk profiled and carefully suited to individual needs – which in turns means that the messaging must change. Instead of selling “European Large Cap Equity Fund”, fund managers will start packaging funds into customized solutions such as “Portfolio I: Relatively high risk, equity based portfolio with 5-7 year investment horizon”.
Asset managers will re-think distribution and create captive capabilities
through intelligent acquisition, just like Russell Investments in the UK who has just purchased On-Line Partnership
, a 600-strong advisor network.
White labeling will create a platform party
as the traditional model of “only made here” dissolves and asset managers broaden their offering to include third-party funds. We’re all platforms now!
Digital advice will drive fees downward
digital platforms steal market share and competition increases from alternative products such as ETFs.
Frictionless fun from new entrants will get Gen Y saving
as brands like Nutmeg continue to shake up the client relationship.
You might not agree with my list. If you don’t, that’s great – we love a debate, so join the discussion by leaving a comment below.
That said, I believe that even those who disagree with my view on the future will be seriously focusing on digital positioning during 2014. So here’s my view on four key imperatives to drive success next year.
Future Focus: 4 Things You Need to Get Right Next Year
No debate here I’m afraid — the investments industry is a numbers game, pure and simple.
Clients make decisions based on the data you give them. Important decisions, too, like whether to invest with you and how much of their portfolio to let you manage.
Ultimately, the data you show them – and they way that it’s presented – makes them stay or go… So why do so many asset managers put up with sub-standard technology If you fail to properly manage data about your products (sorry, solutions!), if you fail to invest in automation that can deliver a slick user-experience, you risk your shop window looking like a Scrabble board enduring a particularly bumpy flight.
On average, it takes me two to five more clicks than it should do to find the information I want on an asset manager’s website, information about real products presented in a straightforward way that’s easy to understand.
Advisors hate the delay. Retail customers simply delete the bookmark.
Investor education tools have become extremely dated. Most are simply souped up questionnaires will a less than subtle sales pitch included.
Learn from the games industry, guys. If you think investment games can’t be fun and informative, go and talk to the guys at Fidelity Labs
and play their Beat the Benchmark game
. If you don’t know what level to pitch at your clients, learn from Fidelity Labs’ example and use iterative client insight
Client analytics that tells you exactly how your digital consumers behave should become your new currency. Do you have the right geeks in your fund marketing team who really understand search optimization and analytics, the guys who can tweak the “knobs and dials” to get people knocking at the front door?
Remember, governments the world over will tell more people to save but at the end of the day, this is a zero sum game. If someone isn’t looking at your asset management website, they’re looking at your competitor’s.
Online communities are a huge part of most other verticals and we’ve thrown our weight behind the value of online communities many times in the past.
The investment industry continuously beats a drum to encourage people to invest over the long term, to foster trust and loyalty with their asset managers. Trust and loyalty are the very essence of community, so why is the web still not used effectively enough to help asset managers build networks of engaged investors.
Sure, we throw up content. We integrate independent news feeds. We even add some interactive polls and voting. But community building on the web can — and is — going far beyond this. It should be about providing privilege information to your insider network, helping them to interact with each other and not just you, encouraging their relationships to bear fruit that goes far beyond short-term performance.
To sum it up, the opportunity is immense. The only threat to fear is ourselves. So let’s make 2014 a good one.