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Friday, December 20, 2019|
So You Haven't Completed Your Strategic Plan for 2020
With all the challenges facing small and emerging asset managers over the last several years, it can be challenging to find the time to think strategically about their business. Working to counter the headwinds of passive inflows, persistent fee pressure, thinning profit margins, increasing regulatory costs, and outmoded distribution models can be all-consuming — like trying to fix a plane while flying it. While it's not entirely excusable, it may be understandable why many firms don't see strategic planning as a priority right now.
Focus on the Vital Issues
Time spent on strategic planning is not a luxury; it is essential. But, if time is limited, it can be more effectively utilized by narrowing your focus to the vital issues — those that will have the most significant impact on your business over the next few years. The key to prioritizing your issues is to ask the right questions of your senior staff and have them rank the issues in terms of the risk they present if no action is taken. If by the end of the process, you narrow it down to the two or three most critical issues, you know where to direct your time and resources.
Take our Growth Assessment for Boutique Managers or continue reading to review our guide to asking questions to pinpoint your vital issues:
Review Your Goals
The biggest mistake many asset management firms make is to center their goals around AUM as the primary objective. However, an AUM goal needs to be dissected to flesh out critical measures and potential obstacles that everyone understands. For example:
Assess Your Current Plan
Before you can think strategically about the year ahead, you need to fully assess your current results and processes to determine what's working and whatís not working. For example:
Evaluate Your Target Markets
Using your sales data and client databases, do a deep dive into your current target markets to determine if you are still hitting the mark with questions such as:
Your target market may be responding to the ongoing industry trend impacting fund pricing and gravitating toward no-load, load-waived, and I shares.
Do your fund pricing and share class offerings still match the preferences and priorities of your ideal client? Are your fees aligned with your competition?
What's Your Story?
Even a well-conceived strategic plan won't help you if you donít have a good story to tell or an effective way to get your story out. As you ask these questions, you may want to seek feedback from your clients to determine how your story is being received.
Recommit to Marketing
If you're competing for the same assets as 20 or 100 other funds, you're not going to gain any ground without a concerted marketing and branding effort. If your marketing efforts are subpar or merely an afterthought, you are probably losing ground. More than ever, marketing is a vital issue for any small or emerging asset management firm, making it a top priority in a strategic plan.
Assess Your Sales Approach
The sales distribution landscape has changed dramatically over the last several years. The same sales team model that got you to where you are may now be obsolete. If you're not getting the level of production from your salespeople to justify your compensation, you have another vital issue to consider.
† With the answers to these critical questions, you can then prioritize your vital issues and develop an implementation plan in order of the risk they pose if you do nothing to address them. Even if you select two or three to start, you can substantially improve your chances of success.
† Dan Sondhelm is CEO of Sondhelm Partners, a firm that helps asset managers, mutual funds, ETFs, wealth managers and fintech companies grow through marketing, public relations and sales programs.
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