The asset management industry will have ever more to deal with the digitalisation issue, tech giants will soon invest the market, ETFs’ share will increase fast, and the forthcoming regulation will induce several changes not only on the distribution side.
These are some of the trends that have been discussed at the Fund Forum 2015 in Monaco, gathering over 1,000 people from 29 June to 2 July.
Quoting Shakespeare during the main conference opening session, Tom Brown, global head of Investment Management at KPMG, said that “the golden age of the asset management industry is before us not behind us.”
The digitalisation of the sector has been highlighted in most sessions of the Fund Forum.
There is a demand from investors to use digitalisation stressed Pr.Amin Rajan, CEO of Create Research and Subhas Sen, senior vice president and chief operating officer at BMO Asset Management.
How fund industry will respond to unmet and emerging investor needs? A product bifurcation driven by Internet is likely to happen according to Sen, who has foreseen a marriage between ETFs and technology. “A match made in heaven,” he said.
New channels (virtual/robot advisors, call centers) driven by a growth in mass affluent will emerge. A new operating model with Internet being a central hub will be implemented.
The possible arrival of tech giants (Google, Amazon, Facebook, Apple, Alibaba) in the asset management industry has been debated.
George Blankenship, former chief strategist of the customer experience at Apple and Tesla Motors, has set the scene. “Imagine Apple offering investment management services. Will people trust Apple? Yes. People, your industry is changing,” he warned.
Sen said he did not think tech giants will be able to conquer the industry and considered them as an opportunity rather than a threat. He added that firms embracing new technology will be the winners.
Disruptors get sometimes disrupted themselves and tech giants do not have a risky DNA pointed out Rajan.
Viki Lazaris, chief administrative officer of BMO Wealth Management, assessed it would take ten years to new entrants to establish themselves on the market.
Regarding tech giants’ arrival, Gina Miller, founding partner of SCM Private, made an analogy. “We are monkeys and they are like cutting down the forest,” she stressed.
However, Miller is convinced that Google is “not looking” at the asset management industry because of the forthcoming regulation she defined as a “tectonic shift”.
She also underlined that as a threat, the digitalisation of the industry may promote short-term behaviour at the expense of long-term investment view.
Jean Botti, chief technical officer of Airbus, advised asset managers to ask themselves if tech firms will be competitors or collaborators. “Innovation is the perpetual motion of evolution and revolution,” he said.
Read more about the Fund Forum 2015 in the next issue of InvestmentEurope.