Asian asset managers look to seize distribution opportunities

Further industry disruption is afoot in Asia as asset managers consider how they can use technology for fund distribution, potentially cutting in on banks’ market share.

In a survey of managers in Asia, Cerulli Associates (CA) found the majority perceive a greater role for digitization in distribution, compared to portfolio management. In contrast, last year the survey found that managers were more focused on client experience using websites or apps.

While banks dominate Asia’s asset management distribution, the landscape is starting to change with the growth in online platforms, said CA in a release—especially in China, given its size. Managers there have begun to upgrade their online platforms as well as use third-party payment platforms to sell products, it said.

Robo-advisors are also influencing distribution, not just in terms of assets but also business strategies, said the firm, with managers building up robo-advisory capabilities, alongside big banks and independent advisory platform providers.

Robos that gain scale might act as enablers for the mutual fund industry in enhancing distribution, said the firm, and those without might be acquired by either banks or asset managers. “This has already happened and could continue to take place,” CA said in the release.

Read: CI enters robo game with WealthBar acquisition

Instead of competing with robos, the firm suggested asset managers consider partnerships. That way, they can minimize the risks of investing in new technologies, and leverage the technical strengths of these start-ups in areas such as big data and artificial intelligence.

Alternative distribution methods will help break up banks’ dominance, CA added, which, in the longer run, could help underserved demographics in Asia’s emerging markets to access financial advice.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.