March 21, 2022 | Matthew M. Caulfield, Managing Director, Head of Client Coverage
With the MMI Summit kicking off March 24 in Fort Lauderdale, the Archer team and I are thrilled to be back on the conference circuit spending time with some of the brightest minds in the industry.
The past two years have been transformative for our industry, especially as it pertains to technology. When the pandemic hit, business continuity plans were put into effect, and we found ourselves in need of superior technology and infrastructure to operate our businesses remotely. Thankfully, the industry responded with great resilience, and now it’s time to turn our sights to what’s next.
There’s no better place to find out where the industry’s going than conferences like the MMI Summit. This year’s agenda is filled with thought leaders who are driving every aspect of our industry forward. As the 2022 conference season kicks off, I am excited to learn more about four trends we’re paying particularly close attention to:
1: Navigating the ‘Great Resignation’
The “Great Resignation” has hit countless industries, and asset management is no different. The battle for talent has never been tougher. Remote work has broken down geographic barriers, many have voluntarily left the workforce, and it’s become increasingly difficult to attract and retain top talent. As the available talent pool shrinks, investment management firms that we work with are seeking to maximize the impact of their existing employees. With many standardized tasks now able to be more efficiently handled by a combination of technology and outsourcing, business owners are creating an operational infrastructure that allows employees to focus on the tasks that matter most to the firm. Today, many investment managers are partnering with firms’ service providers and leveraging the talent of our experienced team to augment their operations teams so they can add value in new and unique ways.
2: Sustained demand for ESG strategies
It’s no secret that ESG strategies have taken the investment landscape by storm. Driven by an increase in the number of sustainable offerings, positive net flows, and market appreciation, global ESG assets are on track to continue growing and eventually exceed $53 trillion by 2025. Acknowledging this upward trajectory, manufacturers and distributors of investment products seeking to capitalize on this shift are allocating resources and prioritizing strategies like SMAs, direct indexing, and models, which can be customized to meet ESG preferences. In recent months, ESG data has become an increasingly critical part of the conversation, and asset managers are looking to technology to meet this need. Integrating this data in an efficient and flexible manner is key, and investment managers are looking to open architecture solutions that enable them to leverage a proprietary and third-party data. Asset managers who get it right will reap the rewards, including expanding their client base, reaching new audiences, and strengthening their brand.
3: The rise of direct indexing
Direct indexing is one of the fastest growing segments of investing as investors seek out tax optimization. With direct indexing, portfolio managers can harvest tax losses at the individual position level as opposed to having to buy or sell the entire fund, leading to significant tax advantages. Until recently, direct indexing required labor-intensive management, especially for managing fractional shares. Today, digital investing platforms and fractional share trading enable small amounts of money to be invested in each position in exchange for a fraction of a share, making direct indexing more accessible to mainstream audiences. With technology doing the heavy lifting, more asset managers can launch their own offerings to provide powerful customization and tax optimization.
4: Adapting to meet the rise of digital assets
If 2021 taught us anything, it’s that digital assets are here to stay. As investors’ interest in digital assets continues to grow, many challenges and questions remain as to how the investment industry will accommodate the sustained demand for this new asset class. We believe that the industry will ultimately move to a place where investors can build multi-asset portfolios that incorporate digital assets. Today, we are seeing the early stages of this shift as asset managers, custodians, and broker/dealers begin to build out their technology to foster the continued rise of digital assets. We are looking forward to meeting with others across the industry to learn how they are planning to evolve to meet this need.
Maximizing your potential
Part of our focus at Archer is keeping up with the many ways our industry is evolving and leveraging our technology and expertise to turn these shifts into opportunities for our clients. As the talent market, changing investor preferences, and new asset classes continue to take our industry in new directions, we’re constantly seeking ways to ensure our clients have the tools they need to thrive. We are looking forward to having these conversations in person again throughout the year to discuss these trends as they continue to take shape.
Matthew M. Caulfield
Managing Director, Head of Client Coverage
Matthew M. Caulfield, Managing Director, Head of Client Coverage, has over 30 years’ experience in the asset servicing industry. His consultative approach has resulted in clients’ ability to realize revenue streams through new product launches and entry into new distribution opportunities, while increasing efficiency and reducing risks and costs. Matt oversees all aspects of client experience, including marketing, sales, solutions, relationship management and client services all geared towards enabling asset managers to achieve their goals through benefit-centered solutions.
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