How Asset Managers Can Organize to Better Use Sales Data

Is your business organized effectively to use all the data you have? Is your business effectively using all of the data you have?”

Research from PwC[1] found that 60 percent of asset and wealth managers “fear that part of their business is at risk to FinTech companies.” As a result, more asset managers are learning that they need greater capabilities to compete in an environment in which the customer has many options that are cost effective and easy to implement.

Resourceful managers are finding ways to better leverage one of their strongest, resources: data. The same research found that 90 percent of asset managers consider data analytics to be “very important,” or “important.”

Asset managers need more robust solutions for gaining visibility into their sales and asset flows across retail and institutional clients. However, more data is not the solution. Managers need to clean, connect and use the disparate types of data they already have better. Consider research from FactSet[2] revealing that the second largest concern among high-net worth investors working with human financial advisors is the accuracy of information received. In other words, asset managers need concise data to source better sales opportunities, and to properly articulate the value of their services to clients.

We looked at five primary professional roles in need of accurate asset management data and why.

1. CSO: Chief Sales Officers Need Smarter Selling Opportunities

The investable assets of the global high-net worth population will increase by an estimated 25 percent to nearly $70 trillion in the next two years according to data from Ernst & Young[3]. To capture a share of this considerable total, sales leaders need to be as equipped as the competition in sourcing viable opportunities to grow AUM. CSOs have volumes of information, however, not all of it is valuable. Growing a client base requires more sophisticated ways to uncover selling opportunities within the data. Therefore, successful CSOs are finding ways to make connections between disparate pieces of data. To do so they are using automated and business intelligence tools so more of their efforts can be directed to client-facing activities. CSOs need to be able to:

  • Aggregate data from disparate sources like as transfer agents, DCIO platforms, managed accounts, UCITS, and ETF data providers for a holistic view of inflows.
  • Easily discern patterns for potential new sales opportunities by connecting disparate types of data such as sales contact activities (calls, meetings, events, etc) with marketing activities, advisor prospect data, sales trends and market intelligence data;
  • Generate simulated scenarios that reveal how changes in channels and territories will impact the business.

2. CMO: Chief Marketing Officers Need Targeted Messaging

Potential customers receive more marketing messaging than ever before. As a result, most potential customers have permanently tuned out the static “noise.” Previously, marketing relied on casting a wide net based on databases of email addresses. However, this method has long fallen out of favor as marketers come to terms with databases that have duplicate data, incorrect addresses, or, most commonly, names of leads that went cold years ago.

For these reasons, effective CMOs are learning to grow existing accounts. To do so they are going deeper into the granular analytics behind established relationships rather than forming a strategy of multiple “light touches.” At the same time, CMOs need a more focused approach to targeting new opportunities with solutions that resonate with specific customer needs. CMOs today need capabilities to:

  • Secure sources for more accurate and reliable Rep and Advisor prospect information
  • Send highly targeted emails to prospects that have a higher likelihood of engaging and be able to score leads based on level of engagement.
  • Uncover the contact information of anonymous visitors.

3. CRO: Chief Risk Officers Need Ways to Calculate Looming Risk

A Deloitte[4] study of responses from 77 financial services institutions with aggregate assets of $13.6 trillion found that only about 16 percent of respondents consider their institution being effective in data sourcing strategies and data architecture and workflow.

These challenges come at a time when leaders face the burden of inheriting legacy systems and slow responses to their ad-hoc data requests. This complex picture is adding challenges to the CRO’s already difficult job. Risk Officers need to be able to formulate contingencies in response to a business landscape increasingly characterized by volatility and change. Additionally, they need to measure the value of data used within the business. In today’s knowledge economy know-how is the ultimate asset. CROs must be able to:

  • Ensure that sales, marketing, finance and operations are all working from the same data drive consistent strategic decisions.

4. CIO: Chief Investment Officers Need Actionable Investing Insights

The same body of research from EY warned that many wealth managers still relying on traditional business models will disappear from the market as customers begin to demand holistic wealth management plans that encompass services covering assets, liabilities, life-plans, and tax strategies.

The research explains that “The role of the advisor will most likely shift toward the profile of a requirements engineer and client supporter serving as a contact, backed by digital tools.” Delivering on this expectation will require that investment managers have up-to-date and accurate data which they can access fast. Delivering on the expectation of multi-faceted solutions means leveraging speed so that the additional time needed to serve one client is not at the expense of another. Moreover, as clients become increasingly cost-conscious, they will expect these solutions to come at competitive prices. Therefore, the successful CIO must be able to:

  • Use data to accurately rank business relationships by existing and potential revenue.
  • Depend on a solution which can act as an early warning system to analyze the data based on flexible criteria such as activities, engagement, and sales patterns to identify which accounts may be at risk of redeeming assets and the magnitude of the outflow
  • Isolate the most efficient distribution channels to better manage operating costs.

5. CTO: Chief Technology Officers Need Agile Data Solutions

In many organizations, the IT department is tasked with generating data in response to requests from numerous departments. Therefore, they need a system that can produce information fast and in a way that makes the outputs easy to digest for decision-makers who are not in the IT field.

Unfortunately, too many CTOs are tied to homegrown systems that were put in place to solve a particular business problem at a particular point in time. However, since that time when the homegrown system was put in place, the business needs have changed, the demands on IT organizations have increased, and the needs for firms to quickly adapt to changing marketing conditions including the recent increase in volatility has some IT groups struggling to keep up with the business needs. In this common scenario the data architecture controls the CTO rather than the CTO controlling the process. In the age of disruption technology is the driving force behind competitive advantage. The CTO can only be as creative as the infrastructure will allow, therefore, the CTO must have the freedom to:

  • Build an inclusive architecture that integrates with other, common databases and CRM interfaces.
  • Design a system that allows for flexible data aggregation, data distribution, data access, data analytic, and reporting.

Working Together: No More Silos

Effective asset managers have learned that where data is plentiful the advantage is not in having more information but having better information that yields meaningful insights—and in working together to analyze and use the information.

Multiple data sources must coalesce into one clear picture for the executive team. This outcome requires clean data that represents complete and accurate sales and asset reporting—and works for the entire firm, not just one department.

Opportunities exist, however, today they are buried deeper within the data. All departments and disciplines within asset manager firms must work in sync in seeking solutions to uncover new revenue opportunities.

 

 

[1] PWC: “Beyond Automated Advice: How FinTech is Shaping Asset & Wealth Management

https://www.pwc.com/gx/en/financial-services/pdf/fin-tech-asset-and-wealth-management.pdf

[2] FactSet: “What HNWIs Expect in a New Era of Volatilityhttps://advantage.factset.com/hubfs/PDFs/FactSet%20Webcast_What%20HNWIs%20Expect%20in%20a%20New%20Era%20of%20Volatility%20.pdf?hsCtaTracking=fdd6b1a1-ead9-44d8-bef8-748eed07e80c%7C8d822343-ecb4-418d-ac5f-1006d4982109

[3] EY: “Wealth Management Outlook 2018: Anticipating and Seizing Global Growth Potential in a Challenging Environment” https://www.ey.com/Publication/vwLUAssets/ey-wealth-management-outlook-2018/$file/ey-wealth-management-outlook-2018.pdf

[4] Deloitte: “Global Risk Management Survey, 10th Edition: Heightened Uncertainty Signals New Challenges Ahead” https://www2.deloitte.com/insights/us/en/topics/risk-management/global-risk-management-survey.html