In key market sectors, it is increasingly hard for asset managers to stand out from the crowd. Markets for mainstream active and passive investing are over-supplied with products. This has commoditised important asset classes and turned asset managers into price-takers.
If product performance and pricing have ceased to be reliable differentiators, unless a firm has a well-known and reliable brand, Client Experience (CX) becomes the differentiating factor in both attracting and retaining clients’ confidence.
CX is about commercial advantage
CX is the combined effect on a client of every ‘touch point’ along its journey through a firm and, of course, providing an excellent CX is essential. A favourable experience promotes broader and longer client relationships that, in turn, protect revenue and increase the chance of a client endorsing firms to others.
As a result, it is an area of focus within many organizations. For example, despite fee and margin pressures, investment in CX appears widespread across the industry, with almost every manager we speak to suggesting that at least one CX project is on its agenda.
However, despite these initiatives being undertaken, CX has long been a difficult ‘puzzle to solve’, and our recent research suggests that as an industry many firms are not getting it right.
Command of the latest data gives Accomplish its edge
As a challenger consultancy firm, Accomplish, regularly conducts primary research around the most prominent issues asset managers face, to help firms understand them and form their responses.
In the second quarter of 2019, Accomplish conducted an industry-wide client experience research project covering a cross-section of professionals from the world’s largest asset managers to boutique active managers and hedge funds, collectively managing over €5.1 trillion of European client assets.
Our recently published report entitled “Client Experience has become the differentiator” highlights some of the key challenges and, vitally, gives a guide for firms as to how to overcome them efficiently and cost-effectively.
Our research found that delivering CX is problematic for many organizations. However, while challenges exist, there are significant opportunities to seized. In summary, our research discovered:
CX will impact your profitability twice
Over 90% of participants agreed a favorable CX keeps clients satisfied and onboard, protecting their revenue. Unfavorable CX, however, can cause client departures, which decreases revenue.
Turning to costs, complexity is a major driver, so minimizing it through a deliberate, controlled and governed CX will defend your net profits.
A lack of CX strategy and CX governance is causing problems
Across the industry, firms are experiencing twice as many indicators of an unfavorable CX than of a favorable one. This indicates a CX issue.
Those surveyed, cited the reasons as being common issues relating to RFPs, onboarding, contracting, reporting and billing. But these activities span the client journey, which implies a deeper root cause(s).
On further investigation, our data implies that the root cause lies not in these activities. The root cause is that ~75% of firms lack a CX strategy and sufficient CX governance to control the operational complexity of serving clients with different needs.
Seize the opportunity to adapt
Importantly, while our research pinpoints that firms face many obstacles firms facing in delivering a good CX, the situation is controllable.
In fact, for organizations who move first, it presents an opportunity for those asset managers to gain a competitive advantage over their peers.
To seize it, firms should consider the four-stage response outlined in Accomplish’s report.
About Adam Grainger, Accomplish
As the founder of “challenger” investment management consultancy firm Accomplish, Adam focuses on help helping investment firms achieve strategic change.
Since founding Accomplish in 2018, and drawing on over 20 years of industry experience, Adam and his team have worked with investment managers on initiatives involving operating model design, cost structuring, strategy development, strategic change management, and most recently, client experience.
Adam has held a broad mix of experience in the investment industry, ranging from senior manager and Transformation Director roles to regional and global COO positions.
Connect with Adam - https://www.linkedin.com/in/adamlgrainger/
Accomplish is a challenger consultancy: we are to the big established consulting houses as FinTechs are to the banks.
Accomplish’s purpose is to help investment firms achieve strategic change, with our core capabilities comprising client experience, operating model design, cost structuring, strategy development, and strategic change management.
We are investment industry professionals, who balance in-house credentials and consulting experience, meaning we have been in our clients’ shoes, and have lived with our decisions.
We are purpose-built through research to meet the investment industry’s needs, and we maintain R&D as a core function. As a result, command of the latest data gives us our edge, which we use to best serve our clients by being “relevant, brief and gone”.
Our most recent work has focused on helping global asset managers to design and implement end-to-end client experience (CX) initiatives.
Our services range from ‘Quick Fixes’, e.g. our CX Health Check, to assignments that blend our core capabilities into consulting solutions around selecting a CX strategy, designing a deliberate CX, and embedding CX data and governance into your organization.