Players across the asset management value chain who don’t pivot in response to today’s changes are risking obsolescence. Asset managers need to reconnect with end investors to understand how they want to consumer as well as what they want to consume. It’s about personalisation and client-centric solutions. Data is the killer app but unlocking its power is the challenge.
We had some excellent panel sessions and presentations during the day, and could write an essay on each . Here are a few highlights of the smorgasbord of ideas that came out of the day…
In the UK
Financial advisers are busy…
- They’re not looking for new business. That means there’s a large unserved audience for the industry, and people in the advice gap are not necessarily too poor to pay.
- Financial advisers often have an eye on the exit and are shaping their investment propositions to make their businesses more saleable. They need help building those robust processes.
Post-pensions freedoms retirement requires the intersection of products, tech and advice… The majority view was as follows, but there were some vocal objections to this line.
- Only a minority of financial advisers have a ‘centralised retirement proposition’ and “that’s not right.”
- Liability driven investing will come out of the institutional world to find retail solutions for retirement.
- Risk-rated solutions for decumulation need to be reimagined and using a bucketing approach in retirement is currently popular, though we’re short on products to go in each the buckets.
D2C and digital
- The DIY investing ecosystem is expanding, with challenger banks, emoney and global tech titans eyeing the opportunities. But the incumbents are currently well placed in a complex market.
- Cash is an underdeveloped asset class in the investing industry. Given that cash is an essential part of almost every portfolio, that makes no sense. New technology and open banking are beginning to address that.
Across Europe
European fund distribution is in flux…
- While MiFID II is harmonising regulation, each market has a different starting point and direction of travel. Despite this, some key trends are emerging at a pan-European level.
- Distributors (to use MiFID parlance) are becoming more selective in their use of products when building solutions, with a trend towards narrower product ranges and – at the extreme end of the spectrum – making greater use of sub-advisory – segmented mandates in UK parlance.
- ‘Data’ means different things to different groups across the value chain. Asset managers are at different stages in their journey to harness data.
- Some are still battling to manage data to meet regulatory requirements, with the burden of dealing with thousands of data points per share class in EMTs.
- Others are further ahead, looking at how to use AI on incoming data to predict and pre-empt future fund flows, turning data management from a burden into an asset.
There are good new markets for UK financial services post Brexit…
- Taking advantage of Brexit will require the UK to do a much better job at selling what we’re good at. And that should include the complete IP of the investment industry all the way through to the quality of our regulatory environment.
- There will be no bonfire of UK regulations post Brexit – despite the longer-term threat of Singapore-on-Thames.
- Status quo is that we’re equivalent (or super equivalent) today and Brexit. If there’s a deal it will come with a transition period that would probably make the process of establishing ‘equivalency’ much smoother than a no-deal where everything is up for negotiation.
Thanks to everyone that attended and contributed to Platforum ID this year. We love getting feedback and it will genuinely influence how we run the event in future so please don’t hold back.