Asset managers are increasingly focusing on risk and compliance in their conversations with clients, their investment strategies and their communications as they prepare for sweeping changes and new entrants in the fund management sector, according to a study by State Street.
The study also shows that a wave of acquisitions is likely to reshape the fund management industry soon.
More than three quarters (77 percent) of the fund managers surveyed say they are offering their clients more transparency on risk and return than they did a year ago, while 72 percent say their conversations with clients are now more focused on risk than a year ago, according to the State Street report.
The research further shows that 64 percent of fund managers say increased risk and compliance demands threaten to divert resources from critical business areas and 72 percent say their clients are demanding more personalized approaches to help them understand risks. Forty-six percent of those surveyed also say their firms are actively considering an acquisition in the face of changing investor demands and expected competition from new entrants to the fund management sector, such as technology and non-financial services companies.
‘Asset managers are focusing on improving their client and competitive proposition, forging closer partnerships with investors, providing clients with the integrated yet highly granular view of portfolio risk they need and developing innovative models that will see off the threat from new market entrants,’ says Jane Mancini, senior vice president and head of asset manager sector solutions at State Street, in a press release.
According to the report, 70 percent of asset managers say they have to rethink their business strategies to accommodate rising demand for multi-asset portfolios, and one in four expects to face direct competition from a new entrant to the sector within the next five years.
