The new open architecture regime in the fund management industry has built its pillars on technology and online platforms. Although this has proved to be an efficient and quick way of accessing investment information and choice for investors, it is definitively not enough.
Setting up the right online funds supermarkets and sophisticated distribution networks is crucial to success but quality of products and investor loyalty are still more important.
Speaking at the Fund Forum in Monaco Sanford Bragg, executive managing director at Standard & Poor’s said: “For larger firms technology and distribution will become increasingly expensive and will put pressure on the quality of the investment core.”
“Technology is necessary, but it’s not sufficient,” said Kjell Nordstrom, assistant professor at the Stockholm School of Economics. He reminded delegates that are succeeding at present that they should not forget that their success is only a “temporary monopoly” and that they have to be innovative and efficient in order to maintain their positions.
Cliff Condon, director of New Media Analysis said that fund managers and distributors have to pay more attention to the way their web-based platforms work, and make an effort to offer investors a user-friendly application. “Investors are sometimes forced to log in and out of different sites instead than getting everything presented to them on screen at the same time and they loose interest,” Condon said.
Delegates agreed that those trying to attract and retain the interest of both retail and institutional investors on their websites have to be able to offer both the best investment products and the best investment advice in a clear and straightforward way and always bear in mind that competition is only a click away.