March 14, 2023 | Stamford, CT — As the new year unfolds, institutional investors and asset managers will have to contend with a host of challenges and changes in a market that is evolving rapidly.
In a report released today, Coalition Greenwich examines some of the biggest trends to impact institutional asset management in the year ahead. Among the trends set to influence the industry in 2023 are the opportunities associated with personalization and customization, the challenge of standing out amid a flood of thought leadership, and the elusive but rewarding goal of strategic partnerships with clients.
“New technology and increased expectations from clients are changing the game in asset management,” says Mark Buckley, Head of Investment Management at Coalition Greenwich. “Because clients today have much less patience for asset managers who fall short in service and communication, managers need to elevate their offerings with new approaches integrating client segmentation tools and personalization strategies.”
Additional top trends to watch in 2023 include:
- Enhancing the Client Experience: In 2023, asset managers will have to work harder than ever to deliver a client experience that meets asset owners’ rising expectations. They will need to pair technological capabilities with high-quality relationship manager coverage to deliver a truly exceptional client experience.
- ESG Evolution: About 90% of asset owners in continental Europe and more than half in the United States now consider ESG in manager selection. Although ESG will continue growing fast in terms of adoption and importance in 2023, asset managers might need to pause and review the ESG and DEI strategies they are putting in place. In Europe, regulators are developing tighter standards on ESG reporting to weed out “greenwashing.” In the U.S., asset managers experienced pushback on their ESG efforts as several state governments moved to bar public pension funds from considering ESG factors in investment decisions. In 2023, asset managers will have to evolve from broad ESG approaches to more nuanced strategies to navigate the shifting, and sometimes contradictory, demands of clients in different regions and with differing perspectives.
- Projecting Positive Purpose: Asset managers will need to show that they have a mission that goes beyond making money. More than 70% of global institutions say a manager’s ability to articulate a clear sense of purpose that aligns with their own beliefs is an important factor in manager selection. Almost 9 out of 10 institutions believe that managers who demonstrate that type of alignment of purpose are more likely to win business. For that reason, asset managers this year will be doing some hard thinking about what they stand for and how to communicate a compelling organizational purpose to the marketplace.
Top Trends in Institutional Asset Management for 2023 summarizes the trends Coalition Greenwich identified through research data and insights from conversations with over 2,000 asset manager clients globally.