Nicsa members gained insight into industry trends from the perspective of leading firms during a recent Face the Membership Roundtable at Nicsa's 2020 Strategic Leadership Forum. The Forum took place at the end of February 2020 in Fort Lauderdale, Florida.
The highly anticipated event was spearheaded by professional investor and TV personality Guy Adami — one of the original “Fast Money Five” on CNBC’s acclaimed Fast Money program. He was joined by experts from Empower Retirement, HSBC, and Northern Trust. [Note: These events took place prior to the March declaration of a global pandemic.]
Deborah Hazell, CEO at HSBC Global Asset Management (USA) Inc., kicked off the session by addressing recent fluctuations in the market amid coronavirus fears.
“HSBC is very Asia-centric, so recent events have fundamentally changed how we’re doing business in the region,” she said. “While we’ve seen extreme reactions in these last couple of days, fundamentally, there is an acknowledgment that there will be an impact on global growth.”
Shundrawn Thomas, President at Northern Trust Asset Management, said he also has a cautious disposition when it comes to recent events.
“Over the last six to nine months we really haven’t seen meaningful improvement in earnings growth, so if you take that as a backdrop and then consider what a possible pandemic could mean in terms of impact on global GDP growth and the economic environment, I would remain cautious,” he said. “Where a lot of people are saying it’s just an overcorrection, that it’s going to snap back, I think it’s something we seriously have to look at.”
Ed Murphy, President & CEO at Empower Retirement, said that his firm has seen minimal asset shifting.
“People are contacting us, but they are inquiring about account balances and looking for assurance as opposed to saying, ‘I want to move from my target date fund into cash,’” he said. “Now, if it continues down this path, we’ll have to see. But I think the retail investor has learned a powerful lesson: that this is long-term money, and not to sell into these cycles.”
PREVAILING TRENDS & OPPORTUNITIES
The panelists said several trends are affecting organic growth in the market, including fee compression, consolidation, the shift to passive management, and increased focus on environmental, social, and governance (ESG concerns).
“Broadly speaking, people are thinking about the impact of their investment dollars,” Thomas said. “Increasingly, while performance is important, the marginal decisions in terms of how people manage their money, are being tied to factors such as sustainability.”
Murphy said retail customers are also increasingly looking for advice. “Whether it’s from a human being or digital resource, it’s about being able to provide a holistic view,” he said. “The expectation is that if we’re going to provide guidance on how to invest and lifetime income solutions, we need to consider the context.”
Hazell said business intelligence and data can play a role in such strategies, ensuring a seamless and personalized customer experience — though the industry has a long way to go. “When we’re talking about retail clients, for example, instead of asking the question, ‘What is your risk appetite?’ we should be able to answer that question ourselves, given the information that we have,” she said.
Thomas said there’s also more work to do on diversion and inclusion initiatives, though progress is being made. He offered a simple litmus test in that regard: “Who is on your executive team, who are in your senior roles, and who is on your boards?” he said. “If those aren’t diverse, you’ll have a hard time convincing me that you’re committed to the pronouncements you’re making.”
Hazell, who sits on the CEO Advisory Council of Nicsa's NICSA Diversity Project, agreed, recommending a research-based approach to creating change. “I see a lot of talk and understanding that it needs to happen, a lot of talk about the business case for diversity, but we’re not going to achieve our goals unless there’s a fundamental shift in our industry.”
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.
#DiversityProject
#FeaturedEvent
#NicsaEvents
#GeneralIndustryTrends
Website Design By Branophia LLC