It’s no secret that our industry is evolving — so how can asset managers not just keep up, but thrive? Leveraging more than two decades of experience, Carolyn Clancy, EVP, Head of the Broker-Dealer Segment at Fidelity Clearing & Custody Solutions (FCCS), helped deconstruct our changing world during Nicsa’s 2019 General Membership Meeting in Boston.
“The asset management business is going upstream quite a bit in terms of thinking about more than just managing the money,” she said. “It’s about helping manage moments of truth — significant life events.”
Clancy described the Advice Value Stack, which Fidelity uses as a hierarchy of client needs. At the base, you’ll find managing the money, the area in which Clancy we’re most comfortable. The second layer, goals-based planning, is also familiar to most.
The third and fourth layers, peace of mind and fulfillment, involve taking care of loved ones, personal time and freedoms, and also purpose and legacy.
The winners in our changing landscape, Clancy said, will be those who continue to create value throughout these stacks as market forces shape investor expectations.
LOOKING INTO THE FUTURE
When it comes to socioeconomic trends in asset management, Clancy said there exists a prominent talent crunch, as well as a skills gap.
“Our unemployment rate is at a 50-year low, and the most recent jobs report showed the number of job openings exceeds the number of unemployed in this country today,” she said. “In our industry alone, there are more than half a million job openings, and we’re looking for skill sets that are hard to find.”
Clancy told the audience that consumers are also evolving in that they expect the same level of personalization and customization with their investments that we expect in our daily lives. “The financial services business in the last few years has woken up to this, spending more on technology and the client experience,” she said.
She also said time scarcity is a growing concern for customers, citing a Gallup poll in which 6 out of 10 Americans reported not having enough time to do what they want. In addition, she said a record number of women are pursuing and graduating with advanced degrees.
“In 40% of households today with kids, the primary or sole breadwinner is now the women,” she said. “We’ve all talked about women becoming more relevant in the context of financial planning and our client base — it’s really happening.”
SEGMENTATION
Clancy told the audience that segmentation is critical to a more efficient customer experience that includes the right solutions to meet their needs. She noted four broad models on which advisors and firms should focus.
Millennials, she said, respond well to goal- and advice-based packages; mass-affluent clients to a financial navigator model; high-net-worth clients have complex needs that demand high-level interfacing; and the family office model factors in multigenerational needs and solution sets.
“The key thing for all of us is to continue to think about how you are going to segment this segmentation in our business —whether you’re selling asset management products, or you’re a full advisor or wealth manager, how are you going to do it?”
Note: Although the observations contained in this work represent the best thoughts of the individuals comprising the NICSA panel, they do not necessarily reflect the views of NICSA or any of its member organizations. Matters addressed in this work may touch upon legal or regulatory matters, however nothing herein is intended to be or should be construed as legal advice. You should contact your own counsel in order to obtain legal advice regarding these or any other matters.
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