Category: Industry Trends

Key Trends Driving the Fund Industry: Increases in Market Competition

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Increases in Market CompetitionThis is the final blog post in our industry trends series. In this series we will look at the top five key trends driving the fund industry in 2014.

The noted Greek Philosopher Heraclitus is credited with the quote “Nothing endures but change”. Over my tenure in financial services, we have seen massive spikes in the financial markets, the rise and fall of interest rates and the introduction of many new investment options. Clearly, change is an enduring legacy in financial services.

In recent times ETFs and Alternative Investments have begun to change the product landscape:

  • The Wall Street Journal reports ETFs climbed to $1.61 trillion in assets under management at the end of 2013. ETFs now account for over 12 percent of the combined $13.9 trillion mutual fund / ETF market.
  • According to “The Mainstreaming of Alternative Investments”, a report by McKinsey & Company, between 2005 and 2011, alternative assets increased from 7.7 percent to 14.3 percent of total global assets under management. The report also found that in 2013, institutional investors planned to increase their portfolio’s exposure to alternatives across the majority of asset classes.

What are we thinking about as the competitive landscape continues to shift?

Competitive Advantage

Significant shifts in distribution strategies and continued expansion of products require firms to find areas where they can create advantage. Clearly, asset managers are focused on finding the right people, the right strategies and the right distribution tactics to deliver products to the market place. Boston Financial is focused on providing the right solutions to service those products in a high quality and cost effective manner. Our advantage is the ability to create solutions that leverage our scale and technology to help solve common challenges for our customers.

Strategic Partnerships

Gone are the days when one platform could serve all masters and all challenges could be addressed from within. Asset managers are looking for expertise to manage the array of new products entering the market. These skills range from investment acumen to resources to technology. In the end, you need to partner with someone that not only is ready for today’s challenges, but is positioned to grow with you and your business.

Regulatory Expertise

If we amended Heraclitus’ quote to our industry today, we’d all agree that “the one constant is regulatory change.” As our industry evolves, so will the regulatory requirements governing it. It has been clear in our last two client surveys that our customers have increased their compliance spend and will continue to do so in the near future.

The other constant in the sea of change is our commitment to maintaining industry and client relationships. The ability to have ongoing dialogue about the market and what is on the horizon has helped Boston Financial reshape product offerings during the past several years. Our goal is to continue that dialogue to build strategic partnerships focused on the future.

George Costas

George Costas

George Costas is a Global Relationship Executive with Boston Financial. He is currently responsible for client engagement initiatives within the firm. George joined Boston Financial in 2004 and has over twenty years of experience in the mutual fund industry. Prior to joining Boston Financial George was the Vice President of Technology Application Services at Federated Investors where he was responsible for defining business strategy and providing product support for the transfer agency technology platform. George also held management positions at Scudder, Stevens and Clark and Putnam Investments supporting multiple operational functions.

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