As we slowly see an easing of restrictions, the need for asset management businesses to act in order to reinforce, improve and in some cases rescue client relationships is evident. But before doing so, managers must think carefully about the status of individual relationships, assessing where they likely stand in order to determine the best course of action.
One of the biggest difficulties is that those managing relationships are likely to have had little, or certainly restricted, communications and engagement with their clients over the course of the last twelve months. Efforts will have no doubt been made in the early days of lockdown; however, the chances are that these have dwindled over time as the process of engaging has become more difficult and, in particular, the novelty of using technology platforms – to facilitate direct conversations or to fill in surveys on levels of satisfaction – has worn off.
This is, of course, dangerous. There is a significant risk that, in this vacuum, decisions have or are been taken without an asset manager’s knowledge which could alter things going forwards.
For some asset managers, this will come as a shock. Businesses may have maintained or even grown AuM during lockdown; it is possible that some will have seen revenues improve, even if they have not increased client numbers, because lots of costs and expenses (offices, travel and the like) will not have been needed in the last year. However, it is important to understand that this is something of an artificial environment and recent experiences shouldn’t automatically be taken as a sign of what it to come.
Asset managers need to therefore carefully read the signs being given by their clients in order to have a clear a picture of where each relationship stands. The language and tone used by a client, the questions they ask of their managers and the extent to which clients involve intermediaries in interactions are all tell-tale indications that dynamics are or have already shifted.
For those relationships that can be maintained, having a clear, unambiguous management structure is a must, once the strength (or otherwise) of each relationship has been ascertained, Asset managers must be able to put clear action plans in place that address identified weaknesses quickly and effectively.
Last minute planning (and subsequent action) will simply not be enough. The most successful relationships will be those that have strategic plans in place which have been thoroughly thought about and are critiqued regularly. They will also incorporate clear metrics to track progress, which are then reviewed on a week-by-week basis to see where asset managers can be most effective in meeting specific customer needs.
Inevitably, the return to normality will come too late to salvage some relationships or influence elements of decision making. Others will likely be living on borrowed time. However, for the latter, understanding and quickly reacting to client needs at least provides an opportunity to retain relationships, even if only for a finite period of time. In a still uncertain world and in an industry that could see sizeable upheaval as we enter the recovery stage of the pandemic, that itself is hugely valuable and beneficial to businesses.