WHY SHOULD ASSET MANAGERS PRIORITISE ENGAGEMENT?
It’s something of a surprise to me that asset managers haven’t taken a more proactive interest in promoting the need for people to save more into their pensions as they have a clear interest in savers of all generations increasing their contributions. Quite simply, the more assets under management (AUM), the greater their fee revenues will be. This applies, in particular, to younger people, as their money will be growing for a long period of time to come, leading to increased AUM for managers to handle on their behalf.
Encouraging increased contributions is of even greater importance given that asset managers are under increasing fee pressure at present, with the trend toward lower fees seemingly set to continue. A recent Boston Consulting Group report  highlighted that pressure on fees has arisen due to competition for the business of both larger institutional investors and retail distributors resulting in pressure on the pricing of individual products.
Adding to the pressure on their balance sheets, asset managers face increasing costs as they need to continually look to acquire or develop new capabilities, introduce new products and asset types, expand into new markets and meet new regulatory requirements. There is also the likelihood of market consolidation with those on the right side of this trend being those who have been early adopters of technology.
This is all a long way of saying that the pressures on asset managers’ businesses mean they cannot afford to ignore such a large (and potentially lucrative) audience as the millennial generation.
There are of course things that managers can do to ensure efficiencies, while also allowing them greater scope to engage with millennials. In the next part of our series, we’ll look at the role technology can play helping managers meet their objectives.
 The Hidden Pressures on Asset Managers – Boston Consulting Group, May 2018
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Why Technology Matters
About Tom Hibbard
As Head of Business Development for ClaritEx, Tom’s focus is on understanding the industry's ever-changing challenges, and bringing relevant stakeholders together to establish how new technologies can make a real difference to reporting in the pensions industry. Tom will use his knowledge of emerging technologies to create and deliver the governance solutions that Simplitium will provide for the pensions market.
Formerly a Business Development Manager at KAS BANK, he has extensive knowledge of the global pensions industry landscape. During his time at the bank, Tom was instrumental in building the strategy and brand for the UK branch, playing a key role in establishing its position in the market and growing revenue.
ClaritEx is the next generation pension cost data monitoring solution for the pensions industry. Powered by Simplitium, the service helps both DB and DC pension schemes access the information needed to make better investment decisions and meet increased governance obligations. In response to the ever-growing demand for greater transparency across UK financial services, ClaritEx provides comprehensive transparency of costs to the UK pensions industry.
Cost transparency is achieved through a combination of innovative technology with a detailed and expert understanding of the investment value chain. By collecting consistent and comparable cost data from both schemes and their underlying service providers, ClaritEx delivers full assurance of costs to market participants in an industry which has, until now, struggled to achieve transparency. For further information, please visit www.simplitium.com/claritex.