Articulating value for money
Investors are looking to the AWM industry to provide value for their money. This means further alignment with investors and those managers that fail to align will fall by the wayside. The constant introduction of new regulations amidst competitive developments in the market will push managers to be even more efficient and to adapt their pricing. Managers must react to the industry’s changing price structures. New fee models are being developed, and investors are searching for the firm that will provide superior investment returns with excellent client service at competitive prices.
Strategic positioning – what’s the plan?
Regulatory and compliance burdens are driving up costs, at the same time investor and regulatory scrutiny are forcing fees lower. Managers need to ensure that investment products and related services are continuously updated to align with investors’ wants and needs, and this forces firms to focus on their strategic positioning. Market leaders have already begun to position themselves through acquiring horizontally, vertically, or both across both product and distribution channels. With the low fee environment fast approaching, PwC advises managers to plan their future position carefully and critically evaluate their distribution and product strategies. Firms with a clear strategic positioning plan are more likely to succeed during the AWM revolution.
Transform through technology – or be eliminated
Advances such as artificial intelligence (AI), machine learning, data harvesting and processing and robotic process automation have begun to already have a significant impact. Firms who have yet to invest in these technologies will find themselves to be highly uncompetitive and many will be eliminated. There is potential for these technologies to create efficiencies and cut costs, particularly in the front office and in sales and service. Managers must embrace these developments and adopt an integrated platform that will make the insights from using AI, data and analytics actionable. Managers who have done so are optimising their business from front-to-back and are ready to face the new reality of lower revenues due to sustained fee pressure.
AWM – fight the battle for talent
Despite the pressures on profitability that are outlined in the report, investment in top talent is essential to ensure the ability to transform and drive success into the future. As technology becomes more central to the AWM industry, talent needs are changing. Managers will need to replace siloed working groups with integrated, multi-skilled teams in order to compete with other companies. These changes will come with costs, but will also provide value in the long run. Winning managers are offering diverse, inclusive, flexible and exciting careers with international programs, digital upskilling and internship initiatives. Laggards in this space risk an “analog death spiral” as they fall behind leaders, FinTech firms, and technology companies who attract top talent.