My lovely wife ‘suggested’ that I should write a post about what I do for a living. Not sure about you guys but when the Mrs ‘suggests’ something, I strongly advise to promptly comply with it… Thus this post is my MVP (minimum viable product) as they say in the start-up jargon, presenting hopefully sufficient features to satisfy (?) early readers.

I am Hong Kong based & work for an asset management company, travelling across the Asia Pacific region to meet with institutions & discuss opportunities in financial markets (to be fair the Rugby Super 15 also takes up many chapters of conversations…).

I have been in this industry for 10ish years. Still young, you may say & I would certainly grant you that. But countless discussions with high class investors in the region & long-haul flights give you time to think.

Asset management needs to be revamped. In particular, communication with investors needs to be given a fresh coat of paint. That is just one angle, but a damn good one. Or else, the industry will be marginalised.

In a nutshell the short to mid-term outlook looks rather challenging (quite a euphemism): a low interest rate & low structural growth environment, higher volatility, declining returns, increased competition (with the likes of ETFs, Robots, Fintech etc) & pressure on fees, increased regulatory burden with a direct impact on profitability, reduced investor confidence etc.

Asset managers are coming under strong pressure to justify their value added. S&P believes that fees could be reduced even further, down to 0% in particular for passively managed funds. Right… Time to compose a will?

Perhaps not. Looking at long term prospects, asset management has actually a unique positioning to benefit from demographic shifts. Ageing population, increasing wealth pools especially in the emerging world, increasing healthcare requirements. In some countries we also witness a decisive shift from defined benefit to defined contribution pension schemes.

But if it wants to capture new opportunities (& protect existing assets), the industry cannot rest anymore on its past achievements & methods of another age. It needs to entirely reshape its approach to building long-term relationships.

Listen to your investors you fool!

The product-push strategy has served the industry very well over the past decades. But the world has evolved and investors’ demands are more sophisticated. The balance of forces has been shifting. Rather than telling them what they need, one had better enhance relationships with investors & focus on what they do truly value. It is high time to move away from this antiquated supply-led model, where businesses primarily take their products to investors. Moreover, sell solutions often answer to problems you assume clients have, not that they actually face. It is critical instead to reflect on the uniqueness of each investor and deepen relationships so as to better understand their needs. Sell the problem you solve for your investors, not the product.

Develop the skill set of salespeople

There is no such thing as fool-proof sales techniques. Yes, there are countless methods such as Spin selling, Power base selling, Miller Heiman etc. Forget about this.

The role of salespeople in the current environment should be to have a dialogue with investors, understand their motivations, needs & ultimately act as a channel to develop trust, a deep & long term relationship.

As such, it is critical that sales are able to guide & assist investors through the thinking rather than just speaking their lines or selectively selling ‘hot products’.

 

Do not blame Marketing when you have a Sales problem!

There is still a lot of confusion between the two functions & it is common practice to turn to Marketing when Sales business development doesn’t live up to expectations. Perhaps a legacy of the past whereby Marketing was sufficient to generate asset raising. It may seem easier to solve the more ‘theoretical’ Marketing, just get to the nearest shelf & you will probably find a book addressing the issue. “Fixing” Sales (ie Salespeople) requires a radical revamp of the approach, even if the result is unpleasant. Marketing is ‘one to many’, Sales is ‘one to one’. Marketing deals with a large set of data & averages, Sales with the specifics & concerns of each investor. If you have a Sales problem, address it with the appropriate Sales solution.

Leverage on social media dashboards

What brings value is not who you know any longer, it is what you know about these investors. It is critical to know their story, monitor their pulse, get timely information on their needs & expectations. Social media is a key channel to deepen relationships & engage in a more efficient manner. On that note Asia is certainly a more dynamic environment than the traditionally conservative Europe, but perhaps this should be the subject of another article.

It is also crucial to keep up to date on main competitors’ initiatives & strategic thinking, most recent market trends etc so as to have the big picture when interacting with investors.