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Future Of Distribution

kasina
kasina

The document discusses implications for asset managers from consolidation and changes in the financial industry. It notes that mergers are creating large global distributors with centralized decision making. This is forcing asset managers to improve segmentation, target territories more precisely, and find new, less competitive opportunities. It also suggests that asset managers will need to capitalize on regions with growing wealth and access the global distribution networks of the newly merged firms. Distribution is highlighted as the key differentiator for asset managers in this shifting landscape.

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The Future of Distribution Opportunities at Home and Abroad October 2, 2008
Agenda + Understanding the current Market + Six Implications on our Industry + Q&A 2
Lets make sense of all of this: 3
Mergers 4
Investments 5
What Does This Mean for Asset Managers? 6
7 Implications + Rising National Accounts + Producing Alpha + Winning Because of Segmentation + Advisor Migration + Redefining Wholesaling + Using the Power of the Web + Capitalizing on Regions with Growing Wealth 7
One to Watch 20,000 advisors and $2.5 Trillion in client assets 8
Pop Quiz: Does this sound familiar? + 20,000 advisors ~8% market share + $2.5 T client assets + 86% US Household penetration + 8% market share of non auto retail sales 1 in 12 dollars is spent here! 9
National Accounts Implications How is the role of the Key Accounts team evolving? 10
Product Implications How will Asset Managers be able to consistently produce alpha? How will larger firms broaden their product offerings? 11
Segmentation Implications 12
Use Segmentation to Improve Distribution + What often separates the success of two large-cap mutual funds: + Distribution, not performance, should be viewed as firms key differentiator Only 36% of firms cited distribution as critical to combating margin pressure The greatest untapped opportunity to improve distribution is segmentation We are focused on attacking territories with a scoped rifle versus a shotgun. 13
Use Segmentation to Improve Distribution + In todays environment, distributors have the upper hand Distributors have reduced basis points paid to manufacturers by almost 50 percent For almost every distributor, 25-50 firms offering similar products are competing + Firms must look for newer, less competitive opportunities 14
Lets Make Sense of the Financial Crisis Advisors migrate to RIAs and Independent Firms 15
Use Segmentation to Improve Distribution + With improved targeting, how should firms allocate wholesaling resources? 16
Virtual Coverage 17
Global Implications 18
Global Implications Strategic Insight 19
Global Implications 20
Global Implications + These mergers are creating global power houses: What do Asset Managers have to do to get access to their global distribution? 21
Challenging Times + Across the US Asset Management industry, margins are still high Average net profits are still around 30% + Why does distribution need to change? Mergers are forcing more centralized decision making at the distributors Mergers are creating global power houses Wholesaling is less effective with wires Advisors are migrating Traditional wholesaling structures are not scalable 70% of advisors are untapped 22

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Future Of Distribution

  • 1. The Future of Distribution Opportunities at Home and Abroad October 2, 2008
  • 2. Agenda + Understanding the current Market + Six Implications on our Industry + Q&A 2
  • 3. Lets make sense of all of this: 3
  • 6. What Does This Mean for Asset Managers? 6
  • 7. 7 Implications + Rising National Accounts + Producing Alpha + Winning Because of Segmentation + Advisor Migration + Redefining Wholesaling + Using the Power of the Web + Capitalizing on Regions with Growing Wealth 7
  • 8. One to Watch 20,000 advisors and $2.5 Trillion in client assets 8
  • 9. Pop Quiz: Does this sound familiar? + 20,000 advisors ~8% market share + $2.5 T client assets + 86% US Household penetration + 8% market share of non auto retail sales 1 in 12 dollars is spent here! 9
  • 10. National Accounts Implications How is the role of the Key Accounts team evolving? 10
  • 11. Product Implications How will Asset Managers be able to consistently produce alpha? How will larger firms broaden their product offerings? 11
  • 13. Use Segmentation to Improve Distribution + What often separates the success of two large-cap mutual funds: + Distribution, not performance, should be viewed as firms key differentiator Only 36% of firms cited distribution as critical to combating margin pressure The greatest untapped opportunity to improve distribution is segmentation We are focused on attacking territories with a scoped rifle versus a shotgun. 13
  • 14. Use Segmentation to Improve Distribution + In todays environment, distributors have the upper hand Distributors have reduced basis points paid to manufacturers by almost 50 percent For almost every distributor, 25-50 firms offering similar products are competing + Firms must look for newer, less competitive opportunities 14
  • 15. Lets Make Sense of the Financial Crisis Advisors migrate to RIAs and Independent Firms 15
  • 16. Use Segmentation to Improve Distribution + With improved targeting, how should firms allocate wholesaling resources? 16
  • 19. Global Implications Strategic Insight 19
  • 21. Global Implications + These mergers are creating global power houses: What do Asset Managers have to do to get access to their global distribution? 21
  • 22. Challenging Times + Across the US Asset Management industry, margins are still high Average net profits are still around 30% + Why does distribution need to change? Mergers are forcing more centralized decision making at the distributors Mergers are creating global power houses Wholesaling is less effective with wires Advisors are migrating Traditional wholesaling structures are not scalable 70% of advisors are untapped 22