The Trajectory of the Asset Management Industry

By Nicsa posted 04-25-2022 09:20 AM

  

Several CEOs spearheading the future of asset management kicked off the last day of Nicsa’s Strategic Leadership Forum with a fireside chat covering the industry’s hottest topics. The event was moderated by Kevin Mahn, President and Chief Investment Officer, Hennion & Walsh Asset Management, and featured leadership from Allspring Global Investments, BNY Mellon, and Columbia Threadneedle Investments.

 

Joe Sullivan, Executive Chair and Chief Executive Officer, Allspring Global Investments, said that we have entered an era of unpredictability due to record-setting inflation levels, uncertainty around Federal Reserve rate hikes, and the unfortunate Russia-Ukraine war.

 

“These significant events are new to many in the industry and may also cause a lot of our investors to rethink the paradigms that they have embedded into their investment process that may need to change and evolve with the fact that the world, in my view, is becoming increasingly unpredictable and potentially unstable,” Sullivan said.

 

Stephanie Pierce, Chief Executive Officer, Dreyfus, Mellon and Exchange-Traded Funds, BNY Mellon, found silver linings in the chaos:

 

“Nobody learns anything from a good market environment,” she said. “In terms of cultivating the next generation, these are the environments where they’re going to really accelerate their learning and maturity as investors.”

 

The Post-Pandemic Hybrid Environment

Jim Bumpus, Head of Intermediary Markets, Columbia Threadneedle Investments, said his firm has long proven itself successful when it comes to in-person service — and that the industry has made great strides working in an all-remote capacity over the past few years.

 

“What we haven’t proven as an industry is that we can work well in a hybrid world,” he said. “I think that's trickier from an efficiency standpoint.”

 

He said financial and registered investment advisors are dealing with different definitions when it comes to hybrid working environments.

 

“How much are they going back to work? What are the different approaches their companies are using? It's kind of all over the place,” he said. “We have to know our clients. We have to be profiling and re-profiling them in times like these, capturing their preferences so that we can, as a firm, serve them well. Our team has gotten better at this, but it’s a continuous process.”

 

Diversity, Equity, and Inclusion

Sullivan said that the asset management industry needs to convert talk into action in terms of Diversity, Equity, and Inclusion (DE&I).

 

“We will solve this if we choose to be intentional about it,” he said. “We have to choose to be

intentional about when we recruit, how we recruit, where we recruit. It's not falling back into what is comfortable.”

 

He stressed the importance of not overlooking the “inclusion” aspect of DE&I. “What I have found over the years is that we could make progress on the diversity part, but at the end of the day, our numbers would not improve. We declared victory by having them walk in the door and

we weren't paying attention to the fact that they were walking out the door because they did not feel included.”

 

Pierce pointed to BNY Mellon’s recent survey of 8,000 men and women across 16 countries, in addition to 100 asset managers with a total of approximately $60 trillion in assets.

 

“Women, as you know, don't invest at the same rate as men,” she said. “The question is why — and the ‘why’ that we found was that women don't feel that the industry caters to them. We did some math and found that if women invested at the same rate as men, we would see about $3.2 trillion come into the investment markets, and over half of that would go into sustainable and responsible investments.”

 

Almost 90% of the asset managers BNY Mellon surveyed acknowledged that their target client was a male. “The takeaway for me was that we have some work to do.”

 

 

May contain forward-looking statements subject to various uncertainties. Personal views and observations of individuals contained herein are as of the date of the live event or written material and do not necessarily reflect the views of Nicsa or its member organizations. Nothing herein is intended to be or should be construed as legal advice. Contact your own counsel in order to obtain legal advice regarding these or any other matters. The information contained herein is for informational purposes only and does not constitute a recommendation of best practices.


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