AMCs, FULL DIGITAL JACKET

Advisor | April 2021

2020 was a year of great success for the industry of asset management, as evidenced by the figures provided by ASSOGESTIONI. 2021 has started with a bang: the amount of assets collected since the beginning of the year has increased reaching 14,6 billion, while the total wealth amounts to 2.416 billion euros.

However, what figures don’t say is that the interaction between AMCs and the distribution system (financial advisors, private bankers and banks managers) has changed radically during the year of the pandemic.

For one thing, road shows with dozens of events and hundreds of meetings have been replaced by online meetings. Early online meetings helped maintaining contact with the distribution system and the AMCs. For their part, sales managers working in AMCs reacted immediately, sometimes employing makeshift tools.

The pandemic witnessed the rise of a new intimacy between financial advisors, private bankers, bank managers and representatives of AMCs – people connected from home with a view of children, cats, kitchens etc., all strictly without tie. 

This contributed largely to the success of the industry of asset management: not only did it help maintaining contacts, but it often contributed to strengthening them. 

Gradually people realized that the lockdown, the rules and restrictions imposed during the pandemic were going to affect everyone’s lives for quite a long time. 

Since then, AMCs have been competing with one another to create the best digital platforms, the most captivating and most creative designs.

At once, it became clear that digital technology was a necessary but insufficient condition for replacing road shows. In fact, those who employed pre-pandemic formats in the new digital world were faced with embarrassing numbers: events worth tens of thousands of euros with an audience made of a few close friends. 

What went wrong? Somewhere along the line, most people realized that simply adopting a new channel was not enough. A change in communication strategies was needed: TV style, a good screen presence, quick questions and answers, no monologues. 

Today, there is an increasing gap between real champions, mere followers, and those who have yet to understand that the world and the way we communicate has changed radically. 

The budgets intended for live events have been diverted to online events, the creation of digital contents and online communication. 

Thanks to a survey conducted by FINER, it was possible to identify three groups of AMCs. 

High-spending companies (15% of the market) with an annual average of € 500k/1 million; medium-spending companies (50% of the market) with an annual average of € 300/500K; and low-spending companies (35% of the market) with an annual average of € 50K (one shot).

The interesting fact is that there is not always a correlation between AUM and expenses in digital efforts. Some bigs of the digital scene are indeed big spenders, however a few small to medium companies have invested a lot on digital tools.

On the other hand, there are AMCs with large assets that invest less than others either because they enjoy a position of oligopoly or because they are more focused on institutional clients.

What is certain is that both the rules of the game and the field have changed. We just need to see if the final ranking will change or feature the same old winners.  

Nicola Ronchetti

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