More than 1,400 of the world’s most influential asset and wealth management professionals gathered at this year’s FundForum event for dialogue around the latest trends, innovation, and the future of the industry. Experts from Broadridge Data & Analytics team contributed to the discussion, with Liam Martin, Director of EMEA Insights, presenting ‘The Future of Distribution’ session and Will Mayne, Principal of Asset Management Global Advisory, presenting and leading the CEO panel ‘Business Model Innovation’. In this article, we delve into insights on the topics that dominated the event and our conversations.

Private Markets – Who, What and How?

If ESG was the prevailing theme of recent conferences, it might have been pipped this year by private markets – particularly wealth investment in alternatives. Significantly improved wealth access to private markets seems inevitable – but what this will look like is still to be determined as asset managers, high net worth individuals, and their intermediaries build a model for innovation and collaboration.

The diversification benefits clearly make these traditionally illiquid investments very attractive; the industry continues to grapple with the challenges of innovating greater access through vehicles with an investment profile more in sync with public market funds. The potential for private credit within these vehicles is rising and a battle for talent and waves of M&A we’ve seen in recent years seem likely to continue. 

Partnerships Give Firms an Edge in Competitive Capability

Intermediaries’ desire for better outcomes and lower fees is driving consolidation in the number of chosen partners, as they prioritize deeper, richer, and more material relationships with a smaller pool of asset managers.

In response to these developments, asset managers are on the hunt for the right opportunities to develop meaningful partnerships that will allow them to earn their place in an emerging partnership economy.

The word ‘partnership’ may evoke unpleasant associations (fee reductions! reduced competitiveness!). But the nascent model allows firms to strengthen along two fronts: soft factors (organizational & process design, talent & training, incentives & culture) and hard capabilities (scalable and customizable investment and tech solutions), that allow partners to stand out and engage with sophisticated counterparties.

The Demographics of Fund Investors are Changing – Fast

Our recent study of US investor trends highlighted the major demographic shifts underway in the funds industry. We call this process democratization.

We are fast approaching the largest generational wealth transfer in history. This new generation of investors have different preferences and priorities, and this wealth transfer will be a seismic event for the asset management industry.

Asset managers will need to rise to the challenge of changing investor dynamics, with millennials and female investors growing their share of total investable assets. The solution: increased personalization and customization. This new generation of investors expect a fund experience tailored to their needs. And they are looking for more than just alpha – this is the generation of conscious investing, and they want outcomes that align with their social and environmental beliefs.

ESG: More Complex, More Resilient

Even if ESG wasn’t setting the agenda this year, it still featured prominently. The industry’s outlook on ESG is evolving, as we move beyond the initial throes of the green gold rush to better understand the opportunities and risks of a mature ESG marketplace.

Changes to SFDR have increased the regulatory burden on asset managers – and raised the specter of greenwashing – as the complexity of the changes introduced to the European legal regime has raised the potential for misuse of the very provisions it was designed to combat.

But firms with a genuine ESG proposition may be experiencing an unforeseen boon, as some managers are finding ESG funds to be a secret weapon for a resilient fund business amid global turbulence.

The Future of Distribution is Narrative

In today’s distribution landscape, product is no longer the sole driver of competitive advantage. Rather, product functions as part of a new driver: a compelling narrative.

As global growth is slowing, competition is intensifying. You can’t be a partner to everyone. You can’t be exceptional at everything. You can’t grow in every region. You need to align your value proposition to your core offering through a combination of stronger distribution, better branding, more flexible service delivery, and faster product innovation.