Overview:
Nicsa’s 2023 General Membership Meeting kicked off with an eye-opening keynote: Mutual Funds 2030: Rising Expectations, led by PwC’s Peter Finnerty and Declan Byrne, Mutual Funds Practice Leader and Research & Analytics Leader, respectively. The session explored how expectations from investors, employees, regulators, and society as a whole have drastically increased through the pandemic, inflation, and market pressures over the last several years. PwC’s thought leaders led a discussion around the impact of these trends and how managers will respond through strategic positioning, product innovation, technology transformation, and the workforce of the future.
Key Trends:
Fee pressure was a significant focus for the discussion, due to the rising expectations of investors. There has been a monumental shift which is only getting more prevalent, from active to passive management, which has inherently resulted in lower revenue for asset managers. Current trends indicate a continued move toward passive investments, even in times of market volatility, and looking ahead to 2030, as the industry continues to mature, fee pressure is expected to continue.
Investors are not only demanding lower fees, but more alpha, increased personalization, and enhanced tech-enabled experiences.
“The investor of the future wants to take risks, they are socially conscious, and they really want a tech-enabled experience.”
Peter Finnerty, PwC Mutual Funds Leader.
Emerging product trends and opportunities were highlighted within the asset and wealth management industry: Opportunities for increased flows into the industry are anticipated across active ETFs, liquid alternatives, digital assets, BDC’s and also socially conscious products.
Overall product innovation is being demanded by investors, managers are continuing to step up to this task through a diversity of new product offerings which should see increased flows into the industry. As the investor base continues to shift to millennials over the next decade this need for innovative new products will be emphasized. This new generation are more likely to take risks, be social conscious and tech enabled. Managers will need to tailor their offerings accordingly.
The paradigm shift in the expectations of NextGen employees was also explored. Individuals entering the workforce are placing a premium on certain key elements that redefine their professional experience. Companies that understand and adapt to these changing expectations are better positioned to attract, engage, and retain the talent that will drive success in the fast-paced, dynamic business environment of the future. Core values of employees have evolved, trends of the past are no longer the status quo. Beyond a paycheck, employees now seek alignment with the core values of the organizations they choose to work for. The significance of shared values lies in fostering a sense of purpose and belonging, contributing to a more engaged and motivated workforce. Diversity, Equity and Inclusion (DEI) is also a key expectation. Companies that champion DEI not only create a more inclusive workplace but also position themselves as socially responsible and forward-thinking entities. NextGen employees expect their workplaces to leverage technology to boost efficiency, facilitate communication, and provide innovative solutions.
Conclusion:
The engaging and informative keynote session shed light on the evolving landscape of the asset and wealth management industry and provided guidelines for successful business planning to Nicsa’s members. To view the PwC Report, please click here: PwC Mutual Funds 2030: Rising Expectations.
Views and observations of individuals contained herein are as of the date of the live event or written material and do not necessarily reflect the views of Nicsa or its member organizations. May contain forward-looking statements subject to various uncertainties. Nothing herein is intended to be or should be construed as legal advice. Contact your own counsel in order to obtain legal advice regarding these or any other matters. The information contained herein is for informational purposes only and does not constitute a recommendation of best practices.
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