Time to Think Different in Asset Management?

The asset management industry is going through a period of unprecedented change. This is the first in a series of posts looking at some of the key implications for asset management firms.

Here’s to the crazy ones

Think Different was the name of an award-winning advertising campaign that was launched by Apple in the late 1990s. (The incorrect grammatical construction was deliberate and insisted upon by Steve Jobs.)

The central element of the campaign was a TV commercial that featured pictures of famous people from science, art, politics, sports, music, and so on, with a voiceover reciting this text: “Here’s to the crazy ones. The rebels. The troublemakers. The ones who see things differently. While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”

Some people today may not realise that twenty years ago Apple’s fortunes were in decline. The Think Different campaign marked the start of Apple’s re-emergence as one of the leading global technology firms and one of the truly great global brands.

And ‘think different’ is exactly what Apple did.

You may be starting to wonder what all this has to do with asset management, but stay with me for a bit longer and I will explain.


How products evolve

Products and services are developed via two different processes. Linear refinement is the process whereby products/services are adapted via a series of revisions and extensions. Step change innovation is where a completely new design, technology or approach is introduced in a discontinuous way. Linear refinement does not typically deliver radical developments; these are delivered via step change innovation.

Take mobile phones as an example. In the 1980s and 1990s, mobile phone technology developed via linear refinement. Over this period we saw advancements such as phones that you could hold in one hand, retractable antennae, and covers that could be flipped or slid open.

And then in 2007 Apple launched the iPhone.

The iPhone was a completely new form of mobile phone. In fact, it wasn’t just a phone. It was a multi-media, multi-functional device: the smart phone. It didn’t even look like a phone. And it didn’t emerge from a process of linear refinement; it is an example of step change innovation. The iPhone was a discontinuity in the evolution of mobile phone technology and only a company like Apple that ‘thinks different’ could have produced it back in 2007.

Most businesses develop their products and services via linear refinement. It is less challenging than trying to create something new from a blank canvas. It lets businesses stay within a corporate comfort zone. And, actually, there is nothing wrong with it. It is a perfectly valid strategy for the development of products and services.

Except when a step change is actually necessary.

And that brings me round to the asset management industry.


Asset management – an industry in transition

Our industry has entered a period of unprecedented change. Today, asset management organisations are facing difficult challenges on several fronts. Revenues are down because of pressure on fees. Profits are being eroded by the cost of complying with a raft of new regulations.

At the same time the expectations of investors, both institutions and individuals, are changing. They want more detail about their investments delivered more often. And more explanation of how value is being provided. And a more customised service overall, with the information that they want to see provided when they want to see it and in the way that they want to see it.

And this is happening in parallel with a transformation in the nature of B2B and B2C interactions across all industries. The universal adoption of digital channels is changing everyone’s expectations and behaviours around the provision of information and the nature of business relationships.

These intra-industry and pan-industry dynamics are combining to create an irresistible force of change in the way that asset management organisations attract new clients and retain the ones they already have.


It’s time for step change innovation in client communications

This is the first in a short series of blog posts that will present the case for step change innovation in the technology used for all forms of client and market communications with all types of investors. For example: client reports, factsheets, and websites.

In the next post we will look at how the distribution channels used by asset management organisations to market their products are changing, and at the challenges this presents.

In the third post in the series, we will explain why the current approach to client reporting is wrong and why different technology is required.

And in the final post, we will present a new model for investor and market communications. A model that can not only meet the challenges arising from the adoption of digital channels, but can also continue supporting the traditional methods for client and market communications that will remain important for some years to come.

Asset management organisations have a long tradition of being conservative in adopting new technology. But if ever there was a time to ‘think different’ in asset management, this is it.


Integrated Publishing Solution's iPlus solution is the cornerstone for organisations serious about building a digital strategy that will work today, tomorrow and long into the future. Read this success story to learn how a global asset manager enhanced sales productivity, transitioned distribution to digital channels and reduced operating costs.

We bring you a series of blog posts, whitepapers and case studies by our team:

Graham Duncan, CEO and Founder of integrate, has significant practical experience in providing successful integrated digital solutions to the Asset Management industry, from the world's first online portfolio valuation portal for Killik & Co, in the 1990's, through to the current global deployments of iPlus 3.

Dr Peter Ellis brings a deep understanding of the Asset Management industry. Managing Director at Deutsche Asset Management and, subsequently, Investit. Chief Operating Officer and Strategic Advisor to BISAM. Peter brings a remarkable depth of knowledge to the integrate team.

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