Are asset managers and wealth managers blurring the lines?

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For the last 5 years we’ve been reading a never-ending stream of stories on passive being the better choice over active or the imminent transition of assets from traditional wealth managers to robo advisors.  Although these stories are often a result of media hype, this shift from active management or towards more automated wealth management has had tangible impact on many of SS&C Advent’s clients and resulted in fee compression amongst other challenges like negative or stagnant asset flow. This industry shift has forced many firms to expand their offerings to continue to drive value for their clients.  This has caused operational pain for firms that didn’t have adequate systems in place to handle the new asset, product and client types.

The reality is that many investment managers tend to have diverse products (i.e. ESG/SRI), services, and clients with unique preferences often implement a combination of passive and active portfolio strategies. This is consistent with a 2017 Investment Advisor Association (IAA) survey conducted in conjunction with Cerulli Associates, where firms that offer both asset management and wealth management were found to have an almost equal distribution of institutional and individual clients. Even more interesting was firms that identified as pure institutional asset managers indicated that 15% of their clients are individuals. Similarly, pure wealth managers indicated that almost 10% of their clients are institutions and almost 87% are individuals. Essentially, we’re in a time where the line between a traditional asset manager and a wealth manager are often blurred.

What does this tell us?

1. Asset mix and business line diversification isn’t slowing down

Almost 25% of firms surveyed by the IAA indicated that diversifying the products offered is a key component of growth plans over the next 12 months, noting this is necessary to continue to attract clients and will continue as competition intensifies from the low cost providers. In many cases, firms are not just looking to attract the same type of client, but are also looking at different types of clients (i.e. Institutional versus Private Client)

2. Fee compression increases need for cost effective solutions

Of the firms surveyed, less than 15% indicated that they would not charge extra for asset allocation and portfolio management services, which means that firms need to be able to offer additional services efficiently and in a cost effective manner.

With these considerations, firms need to ensure that their staff and systems are prepared to efficiently onboard and manage these new assets and clients. Next question is does the incumbent systems have the breadth and depth of functionality and speed to process -from order generation through allocation? At SS&C Advent, we strive to provide intuitive solutions that allow firms to efficiently and confidently implement their strategies.

One such solution is Advent Genesis™ a highly scalable, cloud-based portfolio construction and rebalancing solution designed to enable portfolio managers across the asset and wealth management industry to manage models, rebalance accounts, manage portfolio “drift” and adjust strategies more quickly and efficiently. With this new portfolio management solution, key resources will have the necessary information readily available to analyze and rebalance 1000’s of portfolios in minutes or easily create individual orders based on strategic adjustments to positions.

The market is forcing many firms to evolve and adjust. Genesis is the solution to allow your portfolio managers to efficiently make those adjustments.

To read more: Advent Genesis on


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Posted in Traditional and Alternative Asset Management

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