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Empowering Asset Managers with Data Science

July 14, 2017

The Asset Management industry has endured a lot of change over the last fifteen years. It’s a resilient space that has survived everything from the great depression to the most recent financial crisis.  Today, Asset Managers are experiencing competitive pressures from passive investment strategies, the proliferation of Exchange Traded Funds (ETFs), and niche investment products tailored for advisors.

These competitive pressures are causing Asset Managers to take a closer look at their distribution channels and strategies.  The wholesaling business is not what it used to be.  Gone, for the most part, are the days of lunches and dinners with advisors to pitch your fund offerings.  Advisors are savvy and have technology readily available for conducting their own research.  Advisors are less interested in taking meetings to listen to a product pitch vs getting value in terms of what Asset Managers can do to add value to their advisor/client relationships.

Forced with these challenges, Asset Managers are looking for ways to better target advisors that have the best potential of doing business.  To achieve this, leveraging data provided by the broker-dealers directly as well as third party data providers is imperative.  Internal wholesalers leverage this data to help find advisor leads for their external wholesalers.

In a recent Benchmark study performed by FUSE Research Network, they looked at top internal wholesaling activities to see where they were spending their time.  It’s not surprising that most of their time was spent making outbound calls, while the next biggest time allocation was setting up meetings for their external wholesalers.  An additional 11% was spent on targeting and researching their prospects.

Fig 1: Top Internal Wholesale Activities

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Source: FUSE Research Network – BenchMark Series: Asset Management Distribution; Cost of Distribution 2016

Why is this important?

With all the external pressures Asset Managers are facing, they are taking a hard look at the existing business model and the value their external wholesalers are bringing to their advisor relationships.  Advisors continue to decline face-to-face meetings because they prefer to engage in a digital environment.  This means that every interaction must be meaningful and impactful.

This is where technology can play an important role for Asset Managers by helping them make better data-driven decisions.  In a recent discussion with the head of distribution at one of the top 15 global Asset Managers, he described how they were in the process of restructuring their sales desks to align with the growing importance of the internal wholesaler.  They were leveraging data and analytics to better align territories based on advisor needs.

Fig 2: Ramp Up Business Intelligence Efforts

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Source: FUSE Research Network – 5 Ideas for Improving Your Sales Management and Distribution Strategy

Tier one Asset Managers are already starting to adopt predictive analytics as part of an effort to increase internal and external wholesaling effectiveness but we are far from where the industry should be.  This is an area that Infor has invested in heavily as part of its Dynamic Sciences Labs in Cambridge, MA.  Data Science is helping our Asset Management clients make sense of all the plethora of data available and how to ultimately monetize that data within the distribution channels.

Fig 3: Asset Managers Recognize the Value of Predictive Analytics for Sales

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Source: DST Kasina – Best Practices for Implementing Predictive Analytics in Sales

How technology can help

Infor Sales Intelligence for CRM is a custom predictive software dashboard that looks at advisor data, aggregation of industry information, outside trends, and market changes to present a holistic view of information to the wholesaler in an easily readable format – displaying advisor information, past transactions, and most importantly, a prediction engine.

The solution was developed in collaboration with a top tier Asset Manager to:

  • Expand opportunities for their internal wholesalers to use existing internal/external advisor data
  • Make it easier to analyze advisor data and take action
  • Improve the advisor experience with meaningful interactions

The result is a solution that enables wholesalers to quickly understand what advisors are looking for and why.  They know…before they start talking, what advisors are likely to be looking for and how to turn that call into a vehicle for building relationships with advisors.

Learn more about Infor Sales Intelligence for CRM.

What steps are you taking to be successful in this ever-competitive climate?

Written by: Cesar Pereira, Financial Services Account Manager, Infor CX

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