October 25, 2017 | Archer, the Complete Investment Management Solution
Archer was a co-sponsor of a study conducted by rpmAUM and produced in partnership with MMI, “The Lifecycle of Asset Managers” Industry insights on navigating important stages of the asset management business. (For MMI members, read the content here.). In introducing the study, MMI notes that the study, “provides insights into how domestic asset management firms are managing challenges and opportunities throughout the four stages of their business lifecycle: development, introduction, growth and maturity.”
Any asset manager who is reviewing their own growth and determining a course of action can benefit from the survey. Findings are presented as Issues and Opportunities that can be related to the unique experiences that every firm may have. This report looks at the discrepancy between where firms see themselves in their lifecycle versus where they may actually be.
“For example, over 82% of the firms surveyed classify themselves as being in the growth stage of the lifecycle; however, based on both their years in existence (most were 20-40 years old) and their assets under management/advisement (58% of respondents had less than $10 billion), they appear to be in maturity or in an extended stagnation phase between introduction and growth. These firms seem to be ‘treading water’ for long periods of time...”
One of the issues highlighted is: What comes after growth for investment managers who make it through the development and introduction lifecycle? Firms at a maturity stage can be considered successful, but may not necessarily be “thriving.” In addition to providing information to help determine the correct lifecycle stage, the study also provides insights into key opportunities for asset managers across the stated lifecycle spectrum.
Archer has been privileged to work with investment managers at all lifecycle stages from startup to maturity, and through rebirth and experiencing new growth. Through that experience, we have developed a number of articles and short thought pieces that relate to some of this study’s observations:
Survivors vs. Thrivers -- To move beyond surviving and into thriving territory, firms should be focused on strengthening core competencies to enable their differentiation through new product solutions or by entering new channels of distribution. Archer helps investment managers overcome inertia with a complete solution that can simplify technology and operations across an entire firm.
Thrivers break away from the status quo -- successful growth strategies are based on strong preparation and a willingness to embrace change. Archer enables firms to realize their growth strategies, including growth through acquisition.
Technology: An Emerging Mandate -- Beyond investment process and repeatable performance, technology has become a driving force in firms’ ability to expand. Yet, the study notes a level of insecurity when it comes to moving beyond proprietary systems.
Moving beyond legacy technology can provide firms with a better view of their entire business, simplifying compliance and reporting requirements, while streamlining processes. Once barriers to efficiency are removed, investment managers can identify which changes will make the greatest impact and are better able to evaluate when the time is right for meaningful change.
Marketing Renaissance -- Marketing is noted as an area where there is a gap between self-perception and reality. It is also pointed out that marketing is often an area that may not receive as much attention as firms allocate their resources to products and distribution.
With 80% of responders believing that their brand is differentiated within their target segments, it is important that your communications support your brand. Archer’s integrated client reporting allows you to pay attention to the details and reinforce your established brand.
Inflection Points Provide Opportunities -- In order to determine one’s own best path for growth, the survey notes that investment managers must first know where they are in their lifecycle, and be open to new solutions. Honestly assessing where one may be relative to a growth objective can identify issues and opportunities. Armed with the right technology and flexible operations support helps managers to be prepared to seize opportunities.
This story, told by Salient, a diversified asset management firm and leading provider of alternative and real asset investment strategies, provides an example of how being open to new solutions can ultimately fuel growth.
In concluding “The Lifecycle of Asset Managers,” the authors highlight that honestly self-aware investment firms are in the best position to assess their core competencies. Those who embrace a partnership with technology are open to change, become more agile, and are better able to follow paths to success as opportunities present themselves.
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