Asset Management
Centralizing Retail, Institutional Product Teams Boosts Asset Management Efficiency - Cerulli
The “blurring” between retail and institutional products has driven many asset managers to consider merging their institutional and retail teams to boost efficiency, according to new research from Cerulli Associates.
The “blurring” of retail and institutional products has driven many asset managers to consider merging their institutional and retail teams to increase efficiency, according to new research from Cerulli Associates.
In its latest Cerulli Edge – US Edition, the Boston, MA-based research firm looked at the growing role of investment consultants, as well as demands on request for proposal and database teams, and managing complex product lines. According to the report, half of managers cited the need for reorganization due to heightened product complexity.
“Most managers with a retail legacy no longer think of themselves as mutual fund complexes - they may operate collective trust funds, separate accounts, and a host of other structures,” said Cindy Zarker, director at Cerulli. “Virtually all managers cited overseeing more products and structures than ever before as a catalyst for reorganization.”
Adding weight to the findings, Bank of America last month said it is planting advisors from its wealth units within its investment banking teams to promote teamwork and capture more personal assets.
John Thiel, head of Merrill Lynch Wealth Management, reportedly said at the Reuters Global Wealth Management Summit that advisors from Merrill Lynch Wealth Management, which serves individuals with over $250,000 in investable assets, and US Trust, which focuses on those with higher net worth, have been allocated to groups within the investment bank (see more here).
“Product groups have too much on their schedules to maintain deep expertise in every area that crosses their desk,” Zarker added.
The findings also come at a time when the wealth management industry in general is undergoing a wave of consolidation - namely with respect to mergers and acquisitions but also within certain segments - as investors' needs and desires become more complex and firms look for ways to enhance efficiency - both in terms of product management and overheads.
