Product distribution, personalized investment solutions and new investment vehicles are top-of-mindThe latest research from Cerulli & Associates focuses on new priorities for products and distribution. Access the full report here.
July 11, 2023, BOSTON—The top-three priorities for asset managers this year include broadening product distribution, increasing their ability to offer personalized investment solutions, and creating new investment vehicles, according to the latest Cerulli Edge—U.S. Managed Accounts Edition, 2Q 2023 Issue.
Asset managers remain focused on expanding their distribution into new advisor segments and channels—85% of asset managers identify broadening product distribution as their top priority this year. As assets and headcount continue to swell at independent and hybrid registered investment advisors (RIAs), asset managers are focused on dedicating the appropriate resources to these channels.
Rolling Out Customized Investment Solutions
Asset managers also are focused on rolling out customized investment solutions, as indicated by 50% of executives. While equity direct indexing has received much of the personalization buzz over the last few years, asset managers are not limiting personalization efforts to equities. “As more advisors look to add personalization to their practices, being able to personalize beyond just equities through a multi-asset-class solution will become an important capability for managers touting personalization and customization,” says Matt Belnap, associate director.
Creating new vehicles remains an important goal for nearly half (46%) of asset managers. In terms of product priorities, nearly two-thirds (62%) of asset managers say active exchange-traded funds (ETFs) are a top priority for their firm to develop this year. “The relative tax advantages of the vehicle, combined with increased advisor comfort with ETFs in client portfolios, make active ETFs an attractive proposition for asset managers,” says Belnap. “Still, the active ETF presents untrodden ground for many managers, requiring substantial work.”
Model-delivered separate accounts (50%), interval funds (46%), and CITs (42%) are not far behind, according to the research. “While interest in these types of products could be managers just looking to add where they currently have gaps in their lineup, careful consideration of whether there is appetite for these types of products at distribution partners will lead to a better chance of success for asset managers when they do come to market,” concludes Belnap.