The age-old investment performance USP asset managers once relied on is being overturned.
That may have been a mutual industry-wide feeling that has now been made evident from a forecast based on a report by Broadridge. Within it, worldwide managed assets are projected to grow from around $127 trillion in 2025, to $164 trillion in size. The reason for that jump, though, is attributed to distribution.
Or “distribution alpha,” as it is more specifically identified by report author Nabeel Ansari, looks to be a critical differentiator for organisations looking to stand out in an evermore crowded field.
The planned evolution toward a distribution-focused firm is being driven by a structural pivot aimed at individual investors.
In the US there has been a long-term trend of people saving for retirement and long-term goals through investments, and other global markets are following suit. Particularly where public pensions or state-funded benefits are not as reliable as they once were.
Another ‘beyond-the-USA’ trend: the report ties this growth to the continued built out of active ETFs in Europe where new entrants are competing according to access and fee structure, as opposed to just performance claims.
So, what does this mean for fund marketers?
When the major competitive factor shifts, marketers must then approach their internal systems a little differently.
Some firms may have utilised marketing or IR communications as a supportive prop for the side of the business that deals with direct investment sales. That does not fit with Broadridge’s industry projection, where marketing’s data into LP behaviours through interconnected multi-platform operations can guide ongoing relationships.
Gained investor intel becomes part of the distribution infrastructure – to make outreach repeatable and personalised, rather than relying on one-off campaigns – which will appeal to greater numbers of global investors looking to take responsibility over their financial futures.
They will be looking for educational content from credible sources, not laden with the sort of complexity funds might use when primarily marketing to intermediaries. Funds that prepare for that audience growth will stand a durable acquisition advantage.
In a similar vein, the ETF finding showcases how best to use language for a product launch: “cheap and simple to access” being more persuasive than a traditional “how we outperformed…” clincher.
Source
ETF Express, Distribution steps up as key driver in asset management: Broadridge
