We currently operate in a world where regulators are demanding greater
transparency, shareholders push for improved operational efficiency and customers
demand solutions not products. In the midst of these complex challenges asset
management companies still rely on manual processes in many key aspects of their
business. In order to significantly improve fund innovation outcomes, firms must
begin the systematic and organisational change required to satisfy regulatory, client
and shareholder demands...
For too long asset managers – and clients – have been lazy when it comes to
innovation, following fads and ultimately damaging themselves.
Investors have followed past performance blindly to such extremes that almost 100%
of flows go into top star funds, giving the industry a blockbuster culture.
As we know, a ‘winner takes all’ industry leads to a ‘one size fits all’ business model,
which is doomed to fail both clients and manufacturers.
This study shows that in this new and bleak environment, the soul-searching for asset
managers has already started. Respondents are realistic about their own failings in the
product innovation processes.
Too often ‘bright ideas’ are the engine of product creation at the expense of the
rigorous testing of clients’ needs.
Think about smart beta today: are they really smart for investors? There is hope in
the report’s finding that, in pursuit of a better alignment of interest with clients, asset
managers are shifting their emphasis from product-push to product-pull. This is a top
item on their agenda.


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