MutualFundWire.com: The Institutionalization of Retail Is Accelerating

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Thursday, May 4, 2017

The Institutionalization of Retail Is Accelerating

Asset management distribution is transforming rapidly, and the "traditional wholesaler-led model is going to be under pressure," so predicts Heather Lord, senior vice president and head of strategy and innovation at Capital Group.

Heather Lord
Capital Group
SVP, Head of Strategy & Innovation

From the main stage at the 2017 ICI GMM, Lord is speaking on a leadership panel, "Facing the Future: Fresh Perspectives," which is being held at the Marriott Wardman Park in Washington, D.C. The panel also features Tom Jones, head of strategic relationships at Columbia Threadneedle, and Sean Tuffy, senior vice president of investor services at Brown Brothers Harriman, and Shundrawn Thomas, executive vice president and head of funds and the managed accounts group at Northern Trust Asset Management, is the moderator. Among other topics, the panelists are looking into their crystal balls and sharing how they "see distribution evolving" over the next five years.

"I see the institutionalization of retail accelerating," Jones says, a comment echoed by Lord. "Increasingly the large broker-dealerss are outsourcing a component of their research organizations." "I see the role of wholesaling evolving ... to delivering the firm more broadly rather than just selling a widget," Jones adds.

"The sales conversation has changed," Lord agrees. "It's no longer about a fit of an individual product. It's a lot more about portfolio construction."

Tuffy and Jones warn that asset managers of any size must also increasingly look to global distribution for growth, not just U.S. distribution.

"To survive in the U.S. market is not thriving in the U.S. market," Jones says.

"You're going to need to start thinking about what your global strategy is," Tuffy says. "Distribution overseas is a whole diff ballgame."

"How you get there is critical, too," Jones adds. "If you're not integrated 24-7 then you're global only geographically ... That's fake global."

Lord also predicts that technological change from outside the asset management world is going to keep putting pressure on fundsters, especially in distribution.

"Technology has reset the standard," Lord says, pointing to consumer expectations for seamless tools, customization, real-time access to data and analytics, and more.

Printed from: MFWire.com/story.asp?s=56205

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