The ongoing evolution of asset management is an important industry topic — and was a frequent point of discussion throughout Nicsa’s recent GMM.
“It is no longer a question of ‘if’ asset management needs to change; but rather of what that transformation should look like and how it can create long-term value for all industry stakeholders,” Andre Veissid, Partner - Strategy and Transactions at EY, said on the first day of the event, held virtually October 6-8.
Veissid moderated a panel comprised of market-leading professionals from Capital Group, Fidelity Investments, and Vanguard — all of whom are taking innovative approaches to developing and implementing organizational change.
Heather Lord, SVP, Head of Strategy & Innovation at Capital Group, American Funds, spoke to the importance of a using a solid mission statement as a guiding light.
“For 90 years, Capital Group has been singularly focused on one thing: Improving people’s lives through successful investing,” Lord said. “And for us, that specifically means using rigorous, bottom-up analysis of company fundamentals over a long time to generate superior investment results — and operate at scale so we can do so for a low fee.”
Well-defined objectives such as these help leaders properly orient innovation-based policies and organizational culture.
“It’s not innovation for innovation’s sake,” Lord said. “We are focused on driving value for our clients by leveraging our competitive advantages and how we create value in the world, and pairing that with a deep focus on client needs and doing what’s right.”
Foster a Culture Ripe for Disruption
For Riya Sen, Head of Product Leadership at Vanguard, innovation means maintaining relevancy in the asset management industry while furthering client outcomes. “If you aren’t disrupting yourself, someone else will do it for you,” Sen said.
Michael Snell, SVP, Head of Asset Management Strategy and Central Finance, Fidelity Investments, said the path to disruption is paved with failure. He cautioned firms not to condemn new efforts as failures prematurely.
“It’s easy for an organization to kill innovative ideas early, because innovative ideas rarely show up or present in their earliest form as great,” Snell said. “It’s easy to put ideas out to pasture when you start to interact early on. We work hard to let things live — sometimes longer than it feels we even should — and we try to stay focused on that high-level insight.”
Key Opportunity Areas
Veissid said asset managers can enhance advantage and create value across five essential areas of focus:
- Reorient the business around the client; move from product provider to solutions provider.
- Enhance digital capabilities to develop trust virtually.
- Reimagine the investment proposition, unlocking the power of big data, AI, and human input.
- Maximize growth areas. “Invest where the puck is going, be it alternatives or ESG or targeted global markets like China — whatever the next big thing may be,” Veissid said.
- Transform business and operating models, redefining technology and data strategies while creating a culture of inclusiveness and equality.
Last but certainly not least, celebrate innovation as much as you can, Snell said.
“What shows up on your internal webpage, for example, matters,” he said. “If it’s just financial results or investment performance, then you’re signaling to your organization that’s only what matters. If you’re celebrating innovation internally — even the small things — it sends a clear message to folks that they need to get involved.”
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.
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