INVESTMENT FIRM SHIFTS
Embed organizational agility and client-centric culture
Find ways to engage clients
Better engagement is needed, using technology in a way that speaks the customer’s language. New data provided by clients, customers, and end investors add opportunities for customization. New levels of engagement are possible if new forms of trust can be established.
The investment firm of the future will:
Gain a client edge through client intelligence
Use CRM principles, drawing from extensive customer data, to extend the opportunities for personalized, simple, and speedy engagement. Build trust through excellence in engagement, appropriate use of data, and connection to client-specified goals.
Extend customization into wealth and defined contribution
Seek opportunities to build out customized investment products to wealth and defined contribution business segments using consumerization success principles that are in other sectors (e.g., technology nudges such as “people like you will like products like this”).
Speak in an accessible language
The combination of people and technology affords the best opportunities to make the complex into simple propositions that retain sophistication. Such engagement reaches out to customers, drawing on their values-based preferences and using intuitive dashboards. Use of personal data must balance cybersecurity with customer convenience and experience.
Commit more heavily to the creation of trust
Trust has great value to both the saver giving trust and the firm receiving it. Use technology to facilitate trust, as well as client audits and other measurement to help manage trust.
Outcomes replace benchmarks
High-precision, outcome-driven mandates become dominant in the industry. Mandates evolve from benchmark-anchored arrangements to outcome-driven frameworks that are comprehensively aligned to end-investor needs and goals.
In the investment industry of the future:
The dominant mandates in the industry are outcome-driven and specified in terms such as “liabilities plus a spread,” “CPI plus a spread,” or “cash index plus a spread.” The precision of these mandates deepens the client dialogue on needs and values.
Mandates specify risk in fundamentally important terms such as drawdown risk and mission impairment, with time horizons front of mind and less emphasis on peer comparisons and tracking error.
The industry favors a total portfolio approach using mandates overseen by CIOs or OCIOs that take overall responsibility for investment outcomes.
Investment industry firms and professionals are motivated more strongly by purpose.
Investment firms operate in wider specified mandates in which strategic partnerships offer clients access to wider intellectual property and investment intelligence.