Asset Managers Using Moneyball Lessons to Grow

I was honored to have the opportunity to join a panel of our peers at the CRM Forum last week. My colleagues from DST kasina, Advisor Atlas, BrightScope, and Dial-A-Note, and I shared our perspectives on the changes that the asset management industry will see between now and the year 2020.

In 2003, the book Moneyball by Michael Lewis was published. I originally picked up the book because I loved baseball and had enjoyed Lewis’s Liar’s Poker. While Moneyball was a fantastic baseball book and an enjoyable story, sales really took off because of the applicability of the lessons learned to the broader business world. Thirteen years later, I believe our industry is starting to embrace these concepts and use them to reshape how asset managers do business.

The key themes that we believe will play out over the next 3 to 5 years are:

• Intelligent Distribution: Asset managers who are most effective at utilizing data to drive intelligent distribution will compete more effectively than their peers. This will allow boutique firms to survive in a hyper-competitive market by focusing resources on their niche market. Large firms with intelligent distribution will gain market share and enhance their brand reputation.
• Comprehensive Advisor Profiling: There will be a premium on “knowing your advisor.” In light of the new DOL rules and additional compliance concerns, advisors will continue to specialize and will focus on differentiating themselves from their peers. A good target for one asset manager may be a bad target for others. Firms that are most effective at building and maintaining comprehensive advisor profiles will excel at targeting advisors with a high propensity to buy. These profiles will be comprised of both traditional structured data (sales, asset, and activity information), along with unstructured data (behavioral and social information). Together, these types of data will provide a comprehensive advisor profile, which will help drive more effective segmentation strategies.
• Wholesalers as Educators: As firms improve at targeting advisors with the highest propensity to buy, expectations for wholesalers will continue to increase. Prior to meeting with a wholesaler, an advisor will already have a shortlist of possible solutions and will expect the wholesaler to provide a deeper dive into why their solution is the best choice. While developing a relationship with each advisor is important, a premium will be placed on how much value a wholesaler can add by helping an advisor understand the solution and how it will help their clients. Firms with the most knowledgeable and respected wholesalers will outperform their peers.

In Moneyball, the Oakland Athletics changed the way they scouted and valued players. Through the use of data, they were able to redefine the game and compete with the Yankees and Red Sox, who had budgets that were many times larger than theirs. Just as major league baseball executives and scouts had to change the way that they think about the game, so too will wholesalers and sales management have to change the way they think about asset management distribution. Those who adapt quickly will put themselves in a position to compete and win within an increasingly complex and competitive market.

Turning Data into Intelligence

At SalesPage, we focus on helping our clients gain a competitive advantage through leveraging data to enhance their distribution efforts. SalesPage software solutions allow our clients to more effectively aggregate and exploit all of their enterprise data and systems to create a more intelligent distribution strategy. We look forward to sharing more information about our long-term view of the market and how SalesPage can help your firm compete more effectively.