We highlight the key trends that will be impacting asset management in 2021 and consider the proactive steps that you as a marketer can take to stay one step ahead.
1. Get ready for the reset
Morgan Stanley is predicting a return to something resembling normal in 20211.
It is predicting 25-30% growth per share across regions, with the greatest potential in developed markets. It also notes that, while the equities markets look ready to grow, the outlook is more nuanced for other asset classes.
Russel Investments agrees, predicting “an extended period of low-inflation, low-interest-rate growth that favours equities over bonds”2, while JP Morgan says “the equity market is facing one of the best backdrops for sustained gains in years”3.
Morgan Stanley and UBS both4 recommend focusing on early-cycle outperformers (stocks with the lowest expectations) – smaller companies tend to lead coming out of recessions and may also be more likely to benefit from fiscal stimulus measures.
Pretty much everyone agrees that the return to ‘normal’ will depend on the pace and success of the Covid-19 vaccines.
What this means for marketers:
Be ready for an increase in demand as confidence returns. Make sure your proposition is tight, differentiated and appropriate for the sentiment of the market – and have a fully integrated plan to fight for market share.
2. Focus on diversity
The benefits of a fully integrated and empowered diverse workforce include more effective innovation, better decision-making and, ultimately, more revenue5.
As a result of this, it is also of increasing importance to investors, not least as more data becomes available to external stakeholders.
In fact, institutional investment data collected by eVestment will soon include diversity data not only about the composition of an investment management firm’s leadership, but also at portfolio manager team level, and will also look deeper into the steps that firms are undertaking to raise their diversity profile6.
What this means for marketers:
Reflect the diversity of your organisation in your marketing. And ensure that you are presenting an organisation to the marketplace that future employees from a diverse talent pool will want to work for. This must be baked into all activity, not just a few thought pieces or initiatives led by senior executives.
Among other things, you should consider your use of language and imagery, which voices you are using from within your business and where you are communicating.
3. ESG goes mainstream
The events of 2020 have renewed thinking on sustainable investing (SI) and 55% of polled investors see the pandemic as a positive catalyst for ESG in the next three years8.
Increased awareness of higher returns (39%) and advanced understanding of ESG products (26%)9 are prompting further investment.
The World Wealth Report 202010 identified that 27% of HNWIs expressed interest in SI (younger HNWIs track at 49%) and plan to allocate 46% of their portfolios to SI by the end of 2021.
Throughout 2021, ESG will continue to gain momentum as data and analytics improve and inform the different approaches to SI. Indeed, more than 50% of investment management respondents in North America, Europe and Asia-Pacific indicate that their company is reprioritising ESG policies, programmes, and products as a result of COVID-1911.
What this means for marketers:
ESG needs to be built into your brand story consistently and cohesively – from the language you use to how the principles are embedded in your internal culture.
Marketers looking to attract younger generations of HNWs and UHNWs are especially recommended to bring sustainability to the top of their agenda.
4. Evolving expectations in UX
Digital transformation will be increasingly important for many management firms’ brands. Investors will increasingly make decisions based on the sophistication and elegance of their customer interactions. Many will likely assume that technological prowess in customer interactions translates to prowess in the investment management process12.
With customers’ time and attention such key commodities, shifting from static, data-heavy reports to easy-to-consume, interactive presentations will be vital for engagement13. Gamification to simulate portfolio strategies and visualise ‘what-if’ scenarios helps the investor take a holistic view through insights14.
Meanwhile, technologies such as artificial intelligence and analytics can enhance customer experience by personalising solutions and services15. To this end, the industry faces competitive pressure from BigTech16, especially in its ability to hyper-personalise client interactions through targeted and contextual content fuelled by habits, choices, social media use, travel history and more17.
What this means for marketers:
Think holistically about all of your touchpoints throughout the funnel. Where is the friction that can be removed? Where is the value that can be added? How can you give your customers an edge? Use design thinking to find new solutions that can give you a competitive advantage.
Personalise your content. Don’t waste your audiences’ time. Make every interaction relevant and valuable.
5. Managing transformation risks
Digital transformation is accelerating, and 2021 has the potential to be the year that laggards face strategic risk, not from what they offer investors but from how the offerings are supplemented by digital capabilities19.
Less than half of the firms that are already executing accelerated digital transformation of their business services have also started implementing updated governance and reporting mechanisms. This indicates that these endeavours are not tightly linked and that there is operational risk creeping into the equation as digital transformation is implemented20.
Firms will need to overcome three major obstacles for successful digital delivery: lack of investments; digitally incompatible organisational set-ups; and need for cultural change across the organisation21.
What this means for marketers:
Put in place a contingency plan in case things go wrong. We have already seen some high-profile FS firms have to deal with outages. Communication is key.
Communicating with your customers during change is also vital – even if the risk of disruption is minor. Explain your plans and the benefits they bring.
And, of course, internal communication is key. Don’t allow change to be lost as one message among many on company bulletins. Ensuring your employees are informed, engaged and feel confident about the change is paramount.
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