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23 April 2024

Growth Strategies in Investment Management | Insights from SS&C Advent Experts

Investment management firms continuously seek innovative means to manage the evolving needs of investors while meeting regulatory demands.  

SS&C Advent’s Daniel Eriksson, VP and Global Head of Product Management, and Tim Duffy, Senior Manager of Solutions and Consulting, joined our Tech It Up podcast hosts for a conversation on Uncovering Growth Opportunities in Investment Management. The conversation touched on emerging trends and themes in the marketplace and how firms can leverage technology to take advantage of them, including:   

Separately Managed Accounts (SMAs): Many firms are using SMA products to meet the demand for a more personalized investment experience. This trend results from the rising popularity of direct indexing, in which investors own the stocks that make up a popular index rather than a passive ETF. However, the manager can swap in different stocks according to investor preferences. 

Tim notes that firms must offer a high level of personalized strategies for more clients without increasing headcount. This calls for a powerful portfolio management system capable of quickly constructing custom portfolios with the flexibility to add diverse asset types. It further calls for managers to be better attuned to client needs, understanding their preferences and goals. Daniel said he has seen an uptick in interest in client engagement tools to help strengthen personalized client interactions, enabling investment managers to demonstrate value for the fees they charge. 

ESG: While not a new topic, ESG remains at the forefront, Daniel says, particularly in the European market where the regulatory framework around ESG is further advanced. ESG reporting requirements are the chief driver of demand for ESG solutions in investment funds and portfolios. The US ESG trend is more investor-led, with clients looking to align their investments with their values and interests.  

Tim points out that ESG was a hot marketing tool a few years ago, but firms are now coming to grips with the lack of standardized data and often contradictory ESG data. Technology can help synthesize and compare data from different sources and better explain ESG opportunities to clients. 

Data: In recent years, Daniel notes, firms have accumulated huge volumes of data, but the real value of data is a matter of quality rather than quantity. The challenge lies in effectively harnessing this data to inform decision-making processes, requiring sophisticated technology tools designed for efficient data access and analysis. 

Investment firms must enhance personalized investment experiences, meet regulatory requirements, and use quality data to stay competitive and make informed decisions. Technology is emerging as the key enabler in addressing these challenges and seizing growth opportunities. This podcast episode offers a wealth of knowledge for investment managers looking to differentiate their offerings and optimize their operational models in this competitive industry.