Man Group appoints Robyn Grew as next CEO as Luke Ellis announces retirement

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Man Group announces that Luke Ellis has informed the Board of his decision to retire and that Robyn Grew will be appointed as the next CEO of Man Group.

She will take over from Luke as CEO as of 1 September 2023, at which time she will also join the Man Group Board as an executive director. While she will relocate to the UK following her appointment, she will continue to spend a substantial proportion of her time in the US, given the firm’s presence there. Ellis will continue as CEO and remain an executive director of the Company until 1 September 2023 to ensure an orderly transition and oversight of the Company’s 2023 interim results.

Grew is currently President of Man Group and a member of the Senior Executive Committee, based in the US. She has significant operational and financial services experience as well as a strong track record of demonstrating strategic vision and leadership. During her 14 years at Man Group, Robyn has managed the solutions business, overseen trading and execution as well as acted as Group COO, Head of ESG and General Counsel. Her wide-ranging responsibilities, spanning from investment divisions, risk and technology to legal, infrastructure and operations, have provided her with broad experience and a deep understanding of the business. She has been integral to the firm’s global strategic expansion and oversaw the reorganisation of Man Group’s corporate structure in 2019 to better align it with the global footprint of the business. She has also spearheaded the firm’s diversity programme, Drive.

Before joining the firm in 2009, Grew held senior positions at investment banks Barclays Capital and Lehman Brothers as well as at LIFFE, the largest futures and options exchange in London – since renamed the ICE Futures Europe. These roles saw her based for periods of time in New York, London and Tokyo giving her broad, global experience.

In line with best practice and its roles and responsibilities, the Nomination Committee of the Board has continually reviewed and discussed Board and executive succession plans. This has included identifying potential internal successors for the CEO role and, with the assistance of an external executive search firm, undertaking a thorough preparatory external benchmarking exercise. Following Luke’s decision to retire, the Board was pleased to be able to implement its succession plans and immediately approve the appointment of Robyn as the Company’s next CEO.

“It is an absolute honour to be taking on the role of CEO at Man Group. During more than a decade working at the firm, it has developed into a world leading, technologically brilliant, active investment firm with a fantastically collegiate culture. I look forward to building on that to ensure the firm remains positioned at the forefront of active investing, attracting top talent and delivering for our clients and shareholders alike. Luke has been an incredible ally and mentor to me and I am excited to be able to follow in his footsteps into this new role,” Robyn Grew said.

Luke Ellis commented: “It has been a privilege to be CEO of Man Group and it is easy to want to stay on forever when you are leading such a great team of people. However, I feel that now is the right time to pass the reins to the next custodian of this firm and having worked with Robyn for well over a decade I could not be more thrilled at her appointment. Robyn is truly exceptional and I know that the firm will continue to go from strength to strength under her leadership and that of the highly talented team around her.”

“Luke has had a long and distinguished career in the City, leading several organisations before he landed at Man Group. He has been a fantastic, visionary leader, inspiring the firm to reposition itself for the future and working closely with his leadership team to oversee a period of tremendous growth. He has also played a significant part in developing a great culture that makes Man Group such a wonderful place to work. The fact that we have been able to make an appointment internally for his successor is a reflection of the highly talented team that he has developed around him. We thank him for his leadership of the firm over the past seven years and wish him the very best for his retirement,” John Cryan, Chair, Man Group, commented.

In addition, Cryan added: “I know I speak for the entire Board when I say what a pleasure it is to be able to announce Robyn Grew as the next CEO of Man Group. Robyn is a dynamic, strategic leader with deep operational and commercial expertise, who knows the firm inside-out and is the perfect fit to take the firm on the next phase of its journey”

Emerging Managers Plan to Invest in Headcount and FinTech for Faster Growth in 2023

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Alternative investments FinTech Dynamo Software  released the results of a new survey, Trends, Challenges, & Insights from Leading Emerging Managers. The findings come on the heels of two additional pieces of Dynamo-led primary research, an October 2022 survey of Limited Partners (LPs) and asset allocators and a February 2023 survey of General Partners (GPs).

Throughout March 2023, Dynamo surveyed leaders across the global Emerging Manager marketplace. Participants represented a diverse set of funds, including private equity, venture capital, hedge funds, corporate development, real estate, fixed income, small-cap public equity, and private credit.

“The Emerging Managers we surveyed have a clear vision for moving quickly from scrappy upstarts to industry titans,” said Dynamo Software CEO Hank Boughner. “Despite the market’s ebbs and flows, they are aggressively pursuing healthy returns and hunting for both unicorns and camels.”

The research, contextualized in the Dynamo Frontline Insight Report, uncovered several noteworthy investment, talent and technology strategies being deployed by leading Emerging Managers today.

Top Talent Priority for Growth

To be successful in a tough economic climate, Emerging Managers are prioritizing the acquisition of top talent. Survey participants named “increased internal headcount” as the top area of investment to drive fundraising efforts over the next 12 months.

Like their larger GP counterparts, Emerging Managers do not seem likely to source fee revenue for additional dollars to pay top talent. The same percentage (88%) of GPs Dynamo polled in February and Emerging Managers polled in March indicated their fee structure would remain the same over the next 12 months.

Rather, cost reduction appears to be the go-to-strategy. “Creating efficiencies and optimizing workflows,” “overall cost” and “empowering the whole team to leverage tech” topped the list of reasons Emerging Managers are implementing technology. Operationally, “removing manual data tasks and introducing automated workflows” ranked as the top priority.

FinTech Strategy

Following “increased internal headcount,” two other key areas for investment were “third-party data providers” and “technology platforms.”

“It was validating to learn that Emerging Managers see value in FinTech and data partners,” said Boughner. “It’s what drives our team to iterate continuously and rapidly, as there are new types and sources of data available each day. In close consultation with our clients, we identify and integrate that data rapidly. Perhaps as importantly, we invest in development that facilitates the smoother flow of data throughout the Emerging Manager’s tech stack, which is getting higher by the minute.”

Given the prioritization of data and FinTech, it’s no surprise that Emerging Managers indicated they will not pull back on their tech budgets. In fact, more than half (51%) expect tech budgets to increase over the next 12 months. Another 48 percent said their budgets would stay the same.

The three solutions that received the most votes for future inclusion in the Emerging Manager tech stack were “fundraising and marketing” solutions (No. 1 most popular), “deal management and CRM” (No. 2) and “investor relations” solutions.

Weighing Investors’ ESG Focus

With Deutsche Bank, Bloomberg, and PWC all similarly projecting ESG assets to exceed $100 trillion in five years, more than four out of 10 (43%) Emerging Managers surveyed by Dynamo expect investors will increase ESG and DEI reporting expectations over the next 12 months.

This may be due to the type of investor Emerging Managers are finding success with, beyond the go-to institutional investors. Over the last 12 months, a significant number of Emerging Managers raised the most capital from the private wealth segment, with 32 percent raising the most from high-net-worth individuals and 21 percent raising the most from family offices.

“Institutional investors will continue to be a core category of investment in Emerging Managers, but as more disclosure requirements come about and the barriers to obtaining data gets lower, private investors will receive more benchmarks and be empowered to ask more questions,” explained Danielle Pepin, Dynamo’s Head of Product, Portfolio Monitoring and Valuation. “Although the layers of fiduciary duty and external accountability are fewer for private wealth, progress against targets still needs to be reported, and these targets increasingly include non-financial metrics. Family offices, especially, are eager for data to demonstrate the success of their ESG- and DEI-focused investments.”

Still, investors trusting Emerging Managers with their money are exercising caution when it comes to early opportunities. Just 13 percent of those investors are willing to allocate more than 75 percent of their capital to new investment vehicles. About six in 10 investors (58%) will allocate no more than 25% of their capital to new vehicles.

The Dividend Deluge

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Almost exactly three years ago, I penned an article titled ‘The Dividend Dilemma’. It was the depths of the Covid-induced market selloff; companies were cutting or suspending dividends left, right and center; and analysts were predicting big cuts to global dividends from which they would take years to recover. I anticipated a fall of around 30%.

Yet for all the cataclysmic predictions, payouts took just one year to bounce back. 2021 was a record-setting year for global dividends at $1.47 trillion, a mark that was bettered in 2022 at $1.56 trillion and is forecasted to be exceeded yet again in 2023 at an estimated $1.60 trillion (see Exhibit 1).

We have now gone from the dividend dilemma to the dividend deluge. With 2022 also setting a record for share buyback authorizations, the picture is clear – companies are returning record amounts of capital to shareholders.

 

The volatility we saw across asset classes last year served as a reminder that dividends are typically much less variable than earnings and can provide an important source of total return in challenging markets. Dividends also have a solid track record of keeping pace with inflation and while annual growth wasn’t quite the low double digit level that we saw inflation hit at its peak, there was less erosion in real terms than we saw in payouts from most other asset classes.

So where does this leave us now? Deep value areas of the market, characterized by companies with lower-quality earnings and high debt levels had their day in the sun last year. Such rallies tend to be sharp but also short-lived, which played out in the first quarter of this year as we saw momentum fade abruptly. Investors are likely questioning whether such companies can continue to be successful in a slowing growth (or recessionary) environment. In addition, with interest rates looking like they will be higher for longer, indebted companies will likely see more of their cashflow eaten up by interest payments, rather than being available to distribute to
shareholders.

In contrast to the riskier, deep-value end of the market, we believe a focus on ‘quality’ dividend paying companies, those with strong balance sheets and high returns on equity, can be a powerful factor over time. As shown in Exhibit 2, the top quintile of companies, based on quality1 within the MSCI All Country World Index, has significantly outperformed the wider market over time.

This quality approach will, we believe, be especially important if the harsher economic conditions that many expect come to fruition. Indeed, despite the uncertainty in the market right now, over two-thirds of the companies within a representative global equity income portfolio have increased their dividends in the first quarter of 2023.

These increases suggest companies are generating plentiful free cash flow, and returning it to shareholders is signaling, what we believe is, a healthy confidence in their financial situation.

A few examples of high dividend increases include:

What is striking about these examples is not only the magnitude of the increases but also the diversity of the companies involved, on both a geographical and sectoral basis, which implies broad-based strength.

All of this suggests we may be in a golden period for dividend investing. Companies are returning record amounts of capital to shareholders and are doing so while recording payout ratios that are below long-term averages, meaning these dividends should remain even in the face of slowing growth.

Dividend strategies themselves tend to come into their own in more choppy market environments, where income streams become an even more crucial part of total returns and a lower beta approach may offer some protection from volatility. This serves to highlight the excellent shape of global dividends and should provide equity income investors with significant opportunities – despite volatility, they remain well positioned in the market.

Piece of opinion by Mark Peden, Investment Manager of Aegon Asset Management.

AIS Financial Group Appoints Erik Schachter as Chief Investment Officer

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Photo courtesyAIS Financial Group new Chief Investment Officer, Erik Schachter

Swiss brokerage firm and third-party fund distributor AIS Financial Group has recruited a new Chief Investment Officer (CIO), Erik Schachter, to bolster its coverage of global markets.

He will report to Samir Lakkis, founding partner of the company.

Schachter brings a wealth of expertise with 10 years of experience working in Finance: Research, Equity, Trading, Derivatives and Consulting. He focused on the analysis of the international financial market to generate efficient investment portfolios. He has a profile oriented to seek opportunities through traditional and alternative financial products. He was a Portfolio Manager at a MultiFamily Office in Argentina, analyzing the international market through research and calls with fund houses to find the best investment strategy.

Geneva, Switzerland-based AIS has offices in Panama, the Bahamas and Madrid and provides brokerage, asset management and fund distribution services. AIS currently distributes more than USD 2.5 billion a year in structured products and is diversifying its business line.

The company seeks to consolidate its position and to partner with those asset managers who want to outsource their sales force and benefit from the knowledge and expertise the company has in the region.

US Banking Sector to Enter Consolidation Phase with Recent Collapses

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The US is currently grappling with the dual challenges of elevated inflation and regional banking crises, causing concerns among investors. These could potentially trigger a period of consolidation in the banking sector, said Murthy Grandhi, an analyst at GlobalData in a report.

“The US is currently grappling with the dual challenges of elevated inflation and regional banking crises, causing concerns among investors. These could potentially trigger a period of consolidation in the banking sector. In March 2023, Silicon Valley Bank was acquired by First Citizens and Signature Bank by Flagstar Bank. Now, First Republic Bank is acquired by JPMorgan Chase,” the expert said.

On May 1, 2023, First Republic Bank, which had more than $200 billion in total assets, collapsed, following the earlier collapses of Silicon Valley Bank and Signature Bank, which serve as a stark reminder of how quickly the effects of risky decisions taken at one bank may impact the whole financial system.

First Republic Bank’s failure was attributed to its business model, which focused on catering to high-net-worth individuals and corporations and offering large loans, including jumbo mortgages, using the deposits it received. With historically low interest rates, the bank hoped to entice customers to expand into more profitable products like wealth management. As a result of this, many of the bank’s accounts had deposits exceeding the federally insured $250,000 limit, the report said.

As of December 31, 2022, the bank had uninsured deposits of $119.5 billion accounting for 67.7% of its total deposits. As of March 9, 2023, the bank’s total deposits were $173.5 billion. Following the collapse of Silicon Valley Bank on March 10, 2023, the bank experienced unprecedented deposit outflows, reaching $102.7 billion by April 21, 2023, representing a 41% outflow.

“In this scenario, other midsize banks such as Comerica, KeyCorp, PacWest, Western Alliance Bank, and Zions Bank came under pressure with their share prices falling by 26.6%, 21.5%, 67.5%, 30.3%, and 33.5%, respectively, between March 13 and May 4, 2023, and by 53%, 49%, 86%, 68.9%, and 58.9%, respectively, year-to-date. Recently, Moody’s also downgraded ratings for Zions Bank, Western Alliance Bank, and Comerica.

“For the fiscal year ended December 31, 2022, Comerica, KeyCorp, PacWest, Western Alliance Bank, and Zions Bank reported uninsured deposits of $45.5 billion, $67.1 billion, $17.8 billion, $29.5 billion, and $38 billion, respectively, accounting for 63.7%, 47.1%, 52.5%, 55%, and 53%, respectively, of their total deposits”, the text added.

“Other banks with notable high uninsured deposits include East West Bank, Synovus, Bank of Hawaii, and First Horizon Bank, with 66.7%, 51.3%, 51.9%, and 47.7%, respectively, of their total deposits.

“This high percentage of uninsured deposits points to the fragility of these banking companies and may result in a similar situation that was created by Silicon Valley Bank and Signature Bank.”

Thornburg Plans Leadership Transition

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Photo courtesyJason Brady, president & CEO de Thornburg Investment Management

Thornburg Investment Management, a global investment firm that oversees $42 billion in assets, announced that Jason Brady intends to step down later this year from his role as president & CEO and portfolio manager, as well as from the Board of Directors of Thornburg, and depart the firm.

Mr. Brady will continue in his role to allow for a smooth transition while Thornburg’s Board of Directors undertakes a search for his successor.

“Since joining Thornburg in 2006, I am proud of what we have achieved, particularly the strength of the team we have developed, and I’m grateful for the opportunity to serve as the firm’s president and CEO for nearly eight years,” said Mr. Brady.

“This is the appropriate time for a new leader to step in and I remain fully involved and engaged while the Board searches for a successor,” he added.

“I thank Jason for delivering strong results across our business and notably assembling an experienced group of world-class leaders at the organization,” said Chairman Garrett Thornburg. “Our 41-year foundation leaves us well positioned to make the next phase of our growth the most exciting in our company’s history.”

Record Debt and Soaring Interest Costs Mean Governments Face a Reckoning, but Investors Stand to Benefit

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Governments face a painful reckoning as record debt and higher interest rates mean borrowing costs will double over the next three years, according to the annual Sovereign Debt Index from Janus Henderson. This will put significant strain on taxpayers and public services, but there are opportunities for investors.

2022 and 2023 have seen dramatic changes for government finances around the world. By the end of last year, the total value of global government debt had leapt by 7.6% on a constant currency basis to a record $66.2 trillion, double its 2011 level. The US government accounted for more additional borrowing in 2022 than every other country combined.

Costs are mounting sharply. Government interest bills jumped by almost over a fifth in 2022 (+20.9% constant currency basis) to a record $1.38 trillion. This was the fastest increase since 1984 and reflected both rising rates and the swelling stock of sovereign borrowing. The effective interest rate, which includes older, cheaper borrowing, rose to 2.2% in 2022, up by one seventh, year-on-year. 

This cost continues to rise as new bonds are issued at higher interest rates and older, cheaper debt is retired. The effective interest rate in 2025 is set to be 3.8%, almost three quarters more than 2022’s level. 

This will prove very expensive for governments. By 2025, the governments around the world will have to spend $2.80 trillion on interest, more than double the 2022 level. This will cost an additional 1.2% of GDP diverting resources from other forms of public spending or requiring tax rises. The US is particularly exposed on this measure. 

On top of this come losses on central bank portfolios of QE bonds which must be filled by tax dollars, reversing the pre-2022 flow of profits on these bonds paid by central banks to government finance departments. 

Ongoing annual deficits mean debts will continue to rise, reaching $77.2 trillion by 2025. The global debt burden will rise from 78% of GDP today to 79% of GDP in 2025.

Jim Cielinski, Global Head of Fixed Income at Janus Henderson said: “The level of government debt and how much it costs to service really matter to society, affecting decisions on taxation and public spending and raising questions of generational fairness. Since the Global Financial Crisis, governments have borrowed with astonishing freedom. Near-zero interest rates and huge QE programmes by central banks have made such a large expansion in government debt possible, but bondholders are now demanding higher returns to compensate them for inflation and rising risks, and this is creating a significant and rising burden for taxpayers. The transition to more normal financial conditions is proving a painful process.

We expect the global economy to weaken markedly in the months ahead, and for inflation to slow more than most expect. The market expects the world economy to have a relatively soft landing – a slowdown in growth, but no outright contraction, except in a handful of national economies, he added. Cielinski said that believe this is incorrect.

The sheer volume of debt owed by governments, corporates and individuals nevertheless means that rates do not need to climb as far as in the past to have the same effect. The interest rate tightening cycle is nearing its end. 

Investors stand to benefit. Bonds of all maturities are likely to see yields fall in the year ahead, meaning prices will rise. Short-dated bonds offer higher yields at present because they are more closely connected to central bank policy rates. This is good for those wanting income and tolerating lower risk, but they will see less capital appreciation. The scope for capital gains is significantly greater for longer-dated bonds which we expect to perform very well in the next year as the economy comes under pressure.”

Barbara Reinhard named Chief Investment Officer for Voya Investment Management’s Multi Asset Strategies and Solutions platform

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Voya Investment Management (Voya IM), the asset management business of Voya Financial, Inc. (NYSE: VOYA), announced that Barbara Reinhard, CFA, has been named chief investment officer and head of Asset Allocation for Voya IM’s Multi Asset Strategies and Solutions (MASS) platform, effective Nov. 1, 2023.

Reinhard will succeed Paul Zemsky, CFA, who will retire at the end of 2023. Reinhard will report to Matt Toms, Global Chief Investment officer, Voya IM.

“Barbara is a seasoned investment professional with 30 years of investment experience. She is well respected both within our industry and with our clients,” said Toms. “Since joining Voya seven years ago as head of asset allocation for MASS, Barbara has been a key driver of alpha and risk management for our multi-asset platform and has both attracted and developed a strong team of talented investment professionals.

“In the nearly 20 years since Paul founded the MASS team, it has grown to over $31 billion in assets. In addition, Paul has served as a mentor to many of our employees and has been instrumental in the creation and evolution of Voya IM’s award-winning culture. I know our MASS team will build upon the success and client-centric commitment to delivering results that was started by Paul,” added Toms.

Reinhard joined Voya IM in 2016 and most recently served as head of asset allocation. She is also a portfolio manager on Voya IM’s target date and multi-asset strategies. Prior to joining Voya IM, Reinhard was a managing director and chief investment officer in Credit Suisse’s private banking division.

“We are focused on the needs of our clients and investing in our firm. Equally important, we want to prioritize the continuity of our portfolio management teams while elevating the next generation of our leaders — both of which we have done today,” said Toms.

Voya IM also announced today that Lanyon Blair, CFA, CAIA, Head of Manager Research and Selection, will join Reinhard as a named portfolio manager on the firm’s target date and multi-asset strategies. Blair joined Voya IM in 2015 and is responsible for manager research and selection activities across equity, fixed income, real estate and commodities asset classes for all of MASS’s multi-manager solutions.

Liontrust to acquire GAM Holding AG

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Liontrust announces that it has conditionally agreed to acquire the entire issued share capital of GAM Holding AG (GAM), a global investment management firm with GAM’s Investment Management division having AUMA of CHF 23.3 billion (£20.9 billion) as at 31 March 2023.

The Proposed Acquisition of GAM will accelerate Liontrust’s strategic progress and growth through the broader investment capability and global distribution of the enlarged company, according the firm press release.

Liontrust will provide an environment to enable the investment teams to focus on managing their portfolios without distractions within a strong risk and compliance framework and with the support of the rest of the business to deliver performance and a growth in assets.

The broad range of funds and asset classes will enhance Liontrust’s product range. The expanded range will offer the potential to grow the combined client base and provides Liontrust with differentiated performance across the fund range through the market cycle.

GAM’s existing product offering is complementary to Liontrust’s especially in fixed income and alternatives. GAM will strengthen Liontrust’s fixed income offering, adding capabilities in: Asset Backed securities, Emerging Markets debt, Global Credit, Global Rates, Catastrophe bonds and Insurance Linked Securities.

Equities will continue to be the largest product for the enlarged company, with GAM adding and strengthening capabilities in: Asia, Japan and Emerging Markets, Thematic Global Equities, Europe, Luxury Brands and UK Income. GAM will also expand the multi-asset and alternatives propositions and provide a capability in wealth management.

This increased product depth will be expected to support growth in Liontrust’s market share over time and enable us to better mitigate against market volatility and changing demand for investment styles. The Proposed Acquisition will lead to a step change in scale, with 12 funds having more than £1 billion of AuMA (two for Economic Advantage, one for Global Fundamental, four for Sustainable Investments, four for GAM Fixed Income and one for GAM Multi-Asset).

Liontrust intends to rebrand all GAM funds as Liontrust as soon as possible after completion of the Proposed Acquisition and for the GAM business to operate under the Liontrust brand.

The acquisition will enhance distribution globally and the opportunity to increase sales and market share. GAM is geographically diverse with 3,500 clients based in almost every continent, with 2,700 in Europe. Switzerland, Germany, Italy, the US, Iberia and Latin America are GAM’s largest markets outside the UK.

Liontrust and GAM are both focused on providing excellent client service and the enlarged company will deliver engaging experiences for investors globally.

The fund managers and other employees at GAM will benefit from the environment at Liontrust, the enhanced distribution, strong brand and marketing, and the resources of the enlarged company.

John Ions, Chief Executive of Liontrust, said: “We have been impressed by the quality of the investment teams at GAM. There is commonality in that Liontrust and GAM are both committed to independent and distinct processes for each of their investment teams. Liontrust specialises in providing an environment in which investment teams can thrive, including through the excellence of our sales and marketing and a robust business infrastructure, strong risk and compliance culture, and the stability that comes with financial strength.”

Peter Sanderson, CEO of GAM, said: “I am delighted we have agreed this transaction with Liontrust. Our distinctive approaches to investing and culture are closely aligned, and this combination represents the best opportunity for our talented team of professionals at GAM to continue to provide clients with high conviction active investment strategies. The resulting business will have a strong balance sheet, a broader array of excellent investment products, and a global distribution footprint from which to deliver growth that our shareholders can participate in the future.”

David Jacob, Chairman of GAM, said “I would like to thank all my colleagues at GAM for their hard work and dedication while we worked to determine the best option for the future of the firm.  I am confident that the loyalty of our clients will be rewarded since they will now benefit from the increased capabilities and stability of the combined firm. Our shareholders have been patient, and I and my fellow Board members are unanimous in our recommendation that they should tender their shares in response to the offer from Liontrust.”

Advisors’ Front-Office Technology Is Here to Stay

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Driven by the need to facilitate a digital work environment, advisor use of front-office technology has evolved significantly over the past three years. New research from Cerulli, State of U.S. Wealth Management Technology 2023, finds front-office technology has made a lasting impact on both client satisfaction and advisor productivity.

Between 2019 and 2022, the greatest rates of growth in advisor adoption occurred with technologies that facilitate a digital work environment, such as e-signature, client portals, and video conferencing, driven largely by the needs imposed by the pandemic. Advisors tell Cerulli that these technologies were critical to their ability to operate effectively during the pandemic, but that the benefits experienced go well beyond that. Thus, many patterns of technology use that emerged during the pandemic are likely to continue into the post-pandemic world.

The technologies that are most frequently cited as positively impacting the client experience include e-signature (77%), video conferencing (75%), and client portal (64%). Likewise, the technologies that are most frequently cited as positively impacting advisor productivity include video conferencing (75%), e-signature (73%), and CRM (70%).

“This data aligns with the many conversations Cerulli has had with financial advisors who share how e-signature technology has drastically reduced the time and effort required for clients to open accounts, and create linkages between accounts, for example, obviating the need for papering and re-papering of accounts,” says Michael Rose, associate director. The same applies to virtual meetings, which were rare prior to the pandemic, and are now often a preferred meeting option for clients and advisors. “The precipitous rise in advisors’ use of these applications over the last three years underscores the importance of creative, outside-the-box thinking when it comes to the ways in which they do business altogether,” he says.

Overall, the ways in which advisors source technology varies between affiliation models. For instance, 88% of advisor practices affiliated with captive broker/dealers (B/Ds) source their suite of technology from their home offices with relatively little control over product selection. Independent registered investment advisors (RIAs) represent the other end of the spectrum, with 50% building custom technology stacks sourced entirely from third parties.

“The diverse ways in which advisor practices source their technology are testament to the varying approaches for operating a wealth management practice in the modern day,” concludes Rose.