Expert: James Alexander, KPMG
Facilitator: David Masters
Often we talk about innovations across the value chain, but how can we be sure that as an industry we are building and designing products and services that meet investors’ evolving needs? Indeed, are today’s business models fit for purpose?
- According to KPMG, the asset management industry has seen impressive growth over the past six or seven years and predicts that this will continue for the next twenty years.
- The industry is evolving, with players moving from a product push, investment centric and benchmark driven model to that of a client centric solutions provider.
- The wealthy are getting wealthier but the power of scale means that low-level investors are becoming increasingly important targets.
- There is a generational shift going on – Millennials are very different investors to their parents and grandparents.
- There is a real lack of engagement – people are just not saving enough for their retirement.
Challenges and opportunities:
- What is the future for advice? The average age of the IFA client is going up. How do we replace the man from the Pru?
- Who will advise Millennials? Will social media mean that peer advice becomes more important?
- Millennials are very different creatures to their parents – they are led by instant gratification. How they will engage with their careers and pension savings is still not fully understood.
- Can big data provide the solution here to understanding Millennials and their saving habits?
- Asset managers need to work with those organisations that can acquire customers. Google and Amazon are happy to be the interface – they just don’t want the regulated end investor relationship.
- Attitudes to financial services still need to change – as an industry we do a lot of good and we need to communicate that better.
- Are asset managers becoming content providers now?
- How can fund managers influence the fund choices made between advisers and the clients? After all other considerations, the actual fund choice is often the last consideration.