Breaking down the asset management industry from a customer perspective
Asset Management is a broad industry, and there are many ways to segment it. From an AuM perspective, you can look at it by sector or whether funds are Active or Passive. Taking an investor-first approach we prefer to break it down by profile (individual or professional), and whether they expect a product- or service-type customer experience (CX).
Retail investors
In the top-left quadrant are productised mutual funds aimed at general consumers. Asset managers act as “manufacturers”, distributing their products via Banks, Platforms or Advisors. Led by Marketing, investor experiences have a brand focus and are heavily regulated at a granular content level which poses usability challenges.
Private clients
With higher volume of investable assets, HNWIs can expect a personalised service from Wealth Managers (WMs) and Private Banks. Led by Advisers and Portfolio Managers, experiences are focused on relationship building. Competition from Robo-advisors is forcing even the most traditional firms to digitise, with predictions of a hybrid model as the emerging trend.
Institutional investors
On the B2B Product side, asset managers maintain direct links with professional investors. With a focus on Client Servicing and Reporting, investors demand access to broad data sets that prove the manager’s investment approach. As products are designed for professional audiences, a high level of security and compliance provisions is expected.
Consultants
Institutional funds employ (or retain) Consultants and Analysts to formulate and implement investment strategies. Although typically focused on governance and operations, this category is linked to Institutional Products, so we will treat them as a single unit for CX purposes.
Going deeper
From a firm perspective, the model overlaps: most fund managers offer Retail and Institutional share classes, and bigger ones offer personalised discretionary management. From an investor perspective however, boundaries are clearer - and their CX expectations vary accordingly.
In the follow-up posts, I will explore the CX parameters for each category in more detail. Each investor type has different characteristics and goals, so asset managers need to align different touch-points to deliver exceptional investor experiences.
