“Our jobs are never boring, because our industry is always changing,” Kevin Mahn, President and Chief Investment Officer at Hennion & Walsh Asset Management, said during Nicsa’s 2021 General Membership Meeting (GMM) October 6-8.
Mahn was one of three executive-level panelists who shared perspectives on boosting client value in a rapidly evolving asset management industry. Journalist Sharon Epperson, Senior Personal Finance Correspondent at CNBC, moderated the virtual session.
Panelists agreed that a hefty dose of innovation — both in terms of fintech and social adaptation — is crucial in building and delivering product strategies as the industry’s future unfolds.
“If you don’t embrace technology, listen to your clients, and evolve to meet the changing behavioral preferences of society, you’re going to get left behind,” Mahn said.
Paul Dawe, CEO and COO at HSBC Global Asset Management (USA), touched on the importance of Environmental, Social, and Corporate Governance (ESG) in meeting the expectations of modern investors.
“Our investors are also telling us how we need to change,” Dawe said. “What we do as investment managers to lead that change is going to be critical. And while it’s hard to innovate in this new virtual lifestyle, it’s not impossible.”
Dawe knows this from experience — his global firm established HSBC Pollination Climate Asset Management through a joint venture during the height of the pandemic. The partnership will offer investors broad access to sustainable investment in natural capital, including regenerative and sustainable agriculture, biofuel, and nature-based projects that reduce greenhouse emissions.
According to Dawe, HSBC is also mindful of its internal impact when it comes to ESG. “We hold the mirror up in terms of what we are doing on the environmental and social side. It goes well beyond our products, our clients, and how we’re investing – it’s what we as a firm do as well to make a difference, and what impact we are having.”
Joe Sullivan, Future Chairman and CEO at Allspring Global Investments (Wells Fargo) challenged the all-too-common assumption that environmental and financial gains are mutually exclusive.
“We think that it is possible to deliver very compelling financial investment returns while also delivering outcomes that are meaningful to the investor, environment, and world,” Sullivan said. “We don’t think it’s an ‘or,’ we think it’s an ‘and.’ We have to get away from thinking about it in a binary fashion.”
Sullivan also stressed the importance of a holistic take on diversity, equity, and inclusion.
“We focus a lot on trying to achieve diversity and equity, and we give short shrift to the inclusion piece,” he said. “The problem is you can make really good progress on increasing diversity and equity, but if you don’t have an inclusive culture in your firm, where people truly feel a part of things, you end up losing those people, and you’re not really making any progress.”
Underlying the entire discussion was an overarching theme: Clients want more.
“Coming out of the pandemic, Americans and investors are looking for companies that treat their employees right, that give back to their communities, and are good stewards of the environment,” Mahn said. “ESG isn’t just a passing fad — in five or ten years from now, it won’t just be a subset of the industry. It will be embedded in the industry.”
Communication, Mahn said, is essential in keeping a finger on the pulse of investor needs.
“Effective customer relationships go two ways — it’s not just you pitching or delivering product,” he said. “It’s you trying to meet their needs and find solutions, whether that means a product idea, a practice idea, or a technology solution to help them with their end clients.”
Note: Although the observations contained in this work represent the best thoughts of the individuals comprising the Nicsa panel, they do not necessarily reflect the views of Nicsa or any of its member organizations. Matters addressed in this work may touch upon legal or regulatory matters, however nothing herein is intended to be or should be construed as legal advice. You should contact your own counsel in order to obtain legal advice regarding these or any other matters.