The (C)X Factor: Pursuing Innovative Solutions to Meet Client Needs

Asset managers have traditionally distinguished their offering by leveraging their investment expertise to offer differentiated investment products. Today, as new entrants have made the asset management space increasingly competitive, managers are looking to enhance overall client experience as a way to stand out. In other words, asset management firms are thinking about the role of innovative services – not just products – in the overall value they provide clients.

Evolving Client Demands

Better meeting client needs requires both creativity and insight into what investors are seeking. While many asset managers have espoused the mantra of “build it and they will come,” some are beginning to rethink the ways they meet client needs and doing more sophisticated market research.

“Some of the best offerings are not products, but solutions,” said Russell M. Parker, CIMA, Founder and CEO of rpmAUM™, a provider of custom product, brand, and distribution solutions and an Archer strategic partner. “It’s important to understand the need in the market and focus on outcomes for the client.”

Through ongoing conversations with our asset manager clients, it has become clear that industry innovation is impacting not just the types of services firms are able to provide, but how services are delivered to clients. “We are seeing that many of the asset management firms we work with want to better understand client needs and wants so they can better serve them,” said Jessica Frost, Head of Client Experience at Archer. “In terms of what investors are looking for, there are a few common themes that continually arise: expanded investment options, ease of access, and transparency.”

Expanded investment options: Asset managers are going beyond offering more of the same products, and are looking to provide access to differentiated investments, including digital assets and unique tax management platforms.

Ease of access: Investors want a variety of investment products to be accessible through the channels and in formats that are easy to understand and convenient for them to access.

Transparency: Beyond visibility into individual fund performance, investors want to know exactly how their position in a fund affects the performance of their entire client portfolio.

New Avenues of Innovation

Meeting expanding investor needs requires creativity, discipline and, most importantly, a commitment to client experience. “There’s lots of pressure right now for asset managers to be ‘format agnostic,’ but innovation is more than repackaging current capabilities into something new. Innovation is about making sure you are well positioned to solve for what the customers need – an ask that is made more complicated when you also take into consideration needs of distributors, advisors, and the ultimate investor clients. Innovation means rethinking who benefits from what and responding with a market-driven value proposition,” said Parker.

Indeed, rather than pushing to be first to deliver a flashy new service, asset managers are looking for ways to add meaningful value. One challenge that asset managers can face when coming up with solutions is that they must meet the varying needs of the entire investment continuum. The financial services industry is such a tightly integrated ecosystem that one party can only innovate so much on its own before hurdles arise. For example, outdated legacy technology is still fairly prevalent across the industry, which can hinder the ability to offer truly innovative solutions in an integrated, seamless manner. Rather than being limited by the challenges that will inevitably arise, asset managers must stay committed to understanding the available options and, in some cases, disrupting the status quo to drive progress.

Partnerships that Enable Growth

Asset management firms have enough to do when it comes to navigating challenging markets, delivering top level client service and growing their business. Many are choosing to partner with firms like Archer because by outsourcing operations, they can dedicate more focus and staff to building thoughtful strategies, communicating regularly with their clients, and helping them understand how all of their investments are working together. Partners can also help provide guidance on measures other asset managers are taking to meet client needs.

“We enable our clients to innovate and focus on client experience by allowing them to grow without worrying about adding headcount or upgrading technology so they can spend more time servicing their investors and building out a better experience,” said Frost. “Additionally, we provide them with data that can help them better understand their client base – which markets are they most successful in, or which products are resonating in different channels – so they can make decisions backed by numbers.”

The Nonstop Pursuit of Innovation

Innovation is what drives our industry forward. It’s what keeps investors excited and elevates how the industry serves clients. The leaders in asset management will be those constantly seeking progress and a better way to meet client needs. Looking ahead, the premium placed on the core asset management capability will only increase. Access to technological support and expertise will become critical as the rate of change continues to increase. To achieve success in today's crowded asset management space, working with a technology partner that’s keeping pace with the evolution of the industry to allow your investment team to focus on its core, revenue-driving capabilities will be essential.