SI Report Describes Future Fund Distribution Landscape

A new study of global fund distribution features by Strategic Insight (SI) says the future holds a reduced number of blockbuster funds in a more guided architecture context.

SI, an Asset International company, says current flows will go to simple and thematic funds, even though selected “Newcits” funds are picking up net flows and CEOs expect absolute return and investment solutions to dominate the future landscape.

According to the study, information needs and marketing campaigns are changing rapidly with brand, how it is holistically presented to the public, and specific client segments seen as paramount.  “While distributors still love a good story, they are demanding more independent research and thought leadership instead of a sales pitch,” the report said.

On average over the coming decade, small- and medium-sized firms are ready to go after new clients and geographies, while large firms are, for the time being, focused on damage control and client service in their domestic markets.

Companies that are able to effectively communicate both product details as well as what their firm stands for, are successful, but finding the right communicators is challenging and a war for talent is developing, SI said. Client service and the quality of (multiple) relationships are the line of demarcation between a blockbuster and being blacklisted.  As distributors reduce the number of firms they work with, they demand more customized support and tailored information.

The report is based on 1,000 interviews with fund and wealth management executives over two years.