Things You Should Know to Make Your Business Grow

gigCMO Discussion - Marketing in Asset Management Transcript

February 16, 2021

Mark: Hello, everyone. Welcome to 'Things You Should Know to Make Your Business Grow' Podcast'. Today we're having a session about the asset management industry. We have Martin McGovern who's one of our fractional chief marketing officers, and we're also very pleased to welcome today Neil Fatharly. Neil is a highly experienced and commercial board member in the asset management industry with in-depth knowledge and track record in European marketing and distribution. He's currently managing director of GHV consulting. He's a member of the board of advisors of FS MarTech, a senior advisor at Idea Group, and he's the former head of EMA Insight and Product Marketing at T. Rowe Price and Standard Life Investments, and a number of other industries companies early in his career. Welcome to today's podcast, Neil, pleasure to have you here.  

Neil: Thank you.  

Mark: And Martin, of course, welcome to you. This is the second podcast you've joined us on, so it's great that you're able to be with us again today.  

Martin: Yeah, glad to be here and good to reconnect with Neil.  

Mark: Excellent. So, what we want to talk about today is asset management, and there was a great article that came out from McKinsey recently and was talking about the impact of COVID on B2B sales and marketing practices. And there's been an acceleration, obviously, in the shift towards a more digital-oriented interface between buyers and sellers. And this goes across all B2B industries, but it's really changing the role of the more traditional face-to-face relationship management that has taken place, particularly in an area like asset management, where institutional, wholesale distribution are really core to business development. And this has implications for the role of marketing within the history as a whole. And when we talk about marketing, let's talk about the big umbrella, which is basically: How do you get customers to your business? So that includes the marketing department, of course, sales, communications, everything. But this crisis that we're making our way through to some 'new normal' where we don't know exists, is certainly forcing people to change their behaviours, whether they want or not. And because that is being forced, a lot of models are obviously going to be relooked at about what do we do going forward. So one of the big issues in sales and marketing organisations; a lot of asset management firms still have separate sales and marketing functions, usually with sales leading and marketing providing support services. So, there will be some change in that. Neil and Martin, either one of you, what do you see as some of the key issues that need to be addressed in that coming back to the McKinsey article, if you'd like?  

Martin: Well, I guess, from my perspective, in terms of, you know - I've been in the asset management industry, but I've been in other financial services industries also - is that certainly pre-COVID, I don't think one model exists for many, many firms probably the dominant model you would see the sales team relationship with the client organisation as the pivotal point for distribution as a whole and other functions really supported that relationship. And I think what COVID and the sort of falling away of those of face-to-face encounters has meant is that the relationship has broadened or potentially broadens between the investment firm and its client base. So the client becomes hopefully the concern of the whole firm rather than the concern of the sales team with other functions supporting around it. So I think the sort of potential hierarchy between sales and marketing that you described is up for grabs at the moment - in terms of going forward, it is a much more integrated model where the industry needs to get to.  

Neil: I agree. I think historically in sales and marketing, marketing has probably been a sales support function and kind of sales lead. And it's been going on quite a while, but I think the pandemic has accelerated the fact is that marketing and sales are probably on a fair footing. Many people as managers call it distribution, and I think sales, has Martin has mentioned, previously, it was like the relationship to one-to-one, face-to-face meetings were crucial. But particularly in the institutional space, sales teams have had almost retrain overnight how to engage their clients remotely. I think it's also important in the wholesale market, but I think marketing is much more used to sending out kind of communications on mass to wholesale, whereas, the B2B in institutional is much more relationship-driven. So they've suffered a kind of the lack of ability to do that.  

It's also something, and I think it's quite interesting, that maybe marketing people who were in marketing, are actually starting to become almost heads of distribution. I think the CEOs of this world have recognised the skillsets within marketing are actually probably possibly more appropriate for the wider distribution capability because of the strategic oversight. The knowledge of client is a good skillset where I'm seeing more and more kind of marketing people or traditional marketing people starting to head up distribution teams, including sales and possibly sometimes product.    

Mark: Really interesting. So, most of those marketers are making that step up to a broader organisation role, have they been in the asset management industry and grown with it, or perhaps there's somebody who start on the sales side and actually was kind of led through marketing to give him or her those additional skillsets?  

Neil: I think the asset managers have been pretty functionally-driven. I think COVID has broken down those horizons. If you start out in sales, traditionally, you probably stayed in sales though. There are very few people that historically have gone across functions. I think in the asset management is quite difficult to come out from a different industry and to join the sales team, even within marketing. But I think the skillsets have been recognised that there is crossover. Certainly, it's the strategic leadership level where the knowledge of clients and a variety of clients within marketing is very useful for that oversight of marketing and sales, and also products.  

Martin: I think that traditionally, the asset management industry has been conservative not to fit itself marketing, but generally in terms of recruiting from a well-defined pool. I've had more conversations recently where there's a more open look to people from other industries or akin industries. I think the big challenge in terms of leaders stepping up into more strategic marketing role who've grown up in asset management marketing is that a number of those people probably need help to sort of occupy that seat. If you've been in an organisation for an extended period of time and you've been heading up that or leading part of that marketing function with a support body posture, for them to take on more of a leadership role, that's not an easy step.  

And I think that's where some of the conversations that we've had three peaks CMO in terms of, can we help people with that sort of transition come to bear? So you have people with great knowledge, but maybe they'd been seen in a certain box within the organisation for an extended period of time. And how do you transition that as Neil says, you know, sales might be more open to seeing that broader talent base within a marketing environment and giving it a wider remit, but can you help people make that transition?  

Mark: Yes.  

Neil: I also think that because of the pandemic, the kind of product life cycle or the relationship around fund flows, asset management traditionally during the kind of accumulation stage has been very much around selling, actually putting assets in. I think particularly on the active management side due to fee pressures, regulatory pressures, there's an awful lot of requirements to retain assets. So, the skillsets of the traditional kind of meat-eater of a salesperson has had to be twisted into  retention. And again, I think marketers are very good at recognising the whole spectrum of selling servicing and retaining assets, which again, culturally is perhaps sometimes quite difficult for the true-blooded meat-eater of sales which marketing can support. But, the skillsets of a good marketer probably go right across the product life cycle change, perhaps better than historically the sales teams have done who had just been selling within asset management.  

Mark: Yes, I think that's very insightful to give a good description of what's been going on in some of the longer-term trends. Certainly, one of the key issues every business has had is that what modern marketing is, has really fundamentally changed. And today, it is so much driven by marketing technology. It's huge from the ability to analyse the customers, to track that whole journey, to really determine their experience. And Neil, you're on the board, advisory board of Financial Services MarTech, and obviously, you've joined there and they brought that in for your skills and experience. But what about talking a bit about that marketing toolkit and what's the impact that's having within asset management industry in terms of how business is done, and the ability to really have meaningful insights and initiatives using some of the toolkit that's now available?  

Neil: Good question. I think just the reference to FS MarTech, it's a kind of a network of asset managers, marketers, and financial service marketers. And we're creating a network with vendors of IT that are all FinTech orientated. Whereas before, there were one-to-one conversations; there's now try out need for marketers, not just asset managers, but financial services marketers to understand what's in the market. So, for the success of MarTech, is that sense of a good kind of benchmark of what's going on in industry. I think, I come back to the pandemic has accelerated the digital presence requirements for asset managers, perhaps the only way that client interfacing or interactions is promoted through digital via email or websites. So the skillsets around understanding what's required from a technology perspective are going deeper and deeper. And historically, the website has sat under the marketing kind of remit, so that's become even more important.    

And in some cases, it's almost marketing teams are creating their own distribution channels through the skillsets, particularly to the retail space through the digital channel. There are other very important… kind of the MarTech stack, and I will come back to the CRM platforms, which I'm probably going to be mentioning later. The CRM platform is a skillset that sales obviously put the contacts in, historically, it's been you know, it's a kind of diary management system, but what you can do with CRM now, and certainly one very large provider is dominant in the asset management space. The ability to get closer to the client without them being over overrun by technology is becoming much more important.  

Mark: Yes. And you mentioned there is one dominant provider, appreciate not mentioning who that is, but I'm sure all our listeners want to know who you're referring to because they all don't work in the industry. So, who's the one who has a significant share if not dominant?    

Neil: Well, I think Salesforce is probably the CRM platform that is used. I reckon from what I've heard and knowing other consultants that kind of help in fund managers, probably 70 or 80% of the market globally are using Salesforce. I mean, it's a very good system, but the whole thing around... I've done three or four implementations of Salesforce. And the one thing is the system is great, but actually, it's something that we mentioned earlier, the culture of the business. If you've got top-down sponsorship and buy-in and understanding; it makes it a lot easier. If you haven't got the buy-in from senior management, be-it head of marketing distribution and higher, all these implementations of any technology are very important. And I think the relationships sometimes between the platforms were given to IT to embed; a lot of people have actually recognised that perhaps that's not the greatest model. So what's happened is that IT now perhaps becomes the supporter of the implementation be-it led by marketing or distribution. But ultimately, it's the culture of the buy-in from the business not just from management reporting, but actually across the whole client engagement piece. And I think Salesforce is probably a commodity now. And it's how the business uses it from a cultural perspective and gets buy-in from marketers and sales teams.  

Martin: How that capability is owned and managed within the business -and again, historically it's seen as an IP sport capability or a project, you know, we have to deliver this CRM project and it has all that product structure, where actually, you know, this is here for good. So this is a marketing capability that needs to be recognised and nurtured and developed within the business, otherwise, you have the danger. And when we talk about the strength of marketing versus other functions, but we also have weaknesses within marketing, which is we get very excited by the shiny new thing in the toy cupboard and off we go. So I think it is culture, but it's also genuine expertise and making sure that you've got that expertise and it's fully integrated into the overall marketing strategy.  

Neil: I think that's really important because I think both Martin and I have worked in organisations that as the shiny toy is lovely, but then someone else in the other department or IT goes out and buy something that's similar that doesn't link up. I think the important thing is what is stack here, because if you can embed it all, and in that sense, sometimes the marketing team are probably closer to the IT team than the distribution, making sure that everything is physically joined up before someone goes out, buy something that's not compatible - I think is a crucial point that Martin just made; I've totally reinforced that one.  

Mark: Yes. I mean, that's become a critical issue, the MarTech stack and the management of it, and what happens in what has done. We have one client at the moment, not in the asset management industry, but similar challenges. They have a CRM system, they spend a lot of money on it, but they weren't really using it across the board. And then, the CEO's decided to, you know, we've made that investment, we're using it, so if you can do it on the CRM, do it, we don't want to see it done another way, which drives utilisation effectiveness. And that's the only way to get the money out of these tools and coming back to joining things up - If you don't do that beforehand, it's very difficult because you're trying to get people to change their behaviours.  

Neil: Some of these projects I've worked in, some houses, I mean, if they're spending millions, if not tens of millions on some of these processors. And it has to be positioned with the marketing and sales team correctly, because sometimes it's kind of the heavy hammer of management information, I must have knowing of what's going on. And that the marketing and distribution teams just feel or its management just wanting to kind of get MI rather than actually for the benefit of management from the MI and what's going on, but also enhancing the client relationships. So it's a real balance to get the implementation of these things right for all users of the MarTech capabilities, I think.  

Mark: Yes. Martin, would you like to add anything to that? Otherwise, I think maybe we'll move on and talk about the brand a little bit more.  

Martin: No, I endorse Neil's view in that space, and he probably has a far greater depth of experience than I do.  

Mark: Excellent. So, coming back to brands in the asset management industry, there's some very, very well-known brands and there's others that aren't so well-known. And with the crisis that we're going now, in a lot of firms after the people cost, a lot of time, it's the marketing budget in totality when you put it all in there is the second biggest cost item. So, what are some of the trends and issues you're seeing in the asset management industry concerning brands and comms as a whole?  

Martin: Well, I think some of it in terms f the focus on short-term sales. I think the sales and marketing funnel possibly concentrating on the bottom end of the funnel. And I think if you have a culture which is sales-led, that it's naturally where you gravitate to. But if you then marry that with the fact that we're dis-aggregating those sort of face-to-face sales relationships, and it will be much more about the firm as a whole and its offering. Actually, you need a more sophisticated approach to brand management. You need to recognise that it's not just about that exchange. It is about the overall reputation of the organisation and its capability, and a more sophisticated approach to brand management.  

And it's not about 'Do you invest marketing spend in building brand or selling product'; the joining word should not be "or", the joining world should be "and", because you need to be at the table for both of those. There's a piece of work which I circulated from Peregrine communications quite recently, where they audited the world's top 100 asset management firms and 25% of those firms had not spent any money on above the line advertising in the last 12 months. They saw the marketing spend purely in cost terms, not in terms of business development, and sort of, it's an easy thing to cut. So I think, again, in the same way, we talk about an all-rounded approach to client management, I think a more rounded approach to brand management and certainly, also throw up some interesting stats in terms of size and everything. There's a lot of M&A activity in asset management the last few years that possibly will continue, but size in itself doesn't necessarily deliver a strong brand. So, I think again to be saying, "have these firms got the right setup, have they got the right advice? Are they thinking broadly enough from a marketing point of view and fighting on the battlefront thinking two or three years ahead, as opposed to two or three months ahead?"  

Mark: Yes. Neil.  

Neil: I think brand can cover all manner of things. Obviously, Martin's expertise is kind of the asset management brand. Brand to me covers kind of employee value proposition EVP, and also the culture. And it's quite difficult I think for fund managers in marketing. I'm the brand manager, but again, it comes back to the leadership at the highest level, for sure it is, so that's the rise of the top level. I think also within brand the program or content pipeline as Martin's articulated, the pipeline of asset management; salespeople want pitchbooks and fact sheets. But actually from a brand lifting perspective; sometimes thought leadership can be really important to raise the brand. It doesn't necessarily generate sales immediately, but by lifting the quality or the perception that the asset manager is a leading thought leader, could really raise the brand.  

And I sometimes think that some management hasn't done itself many favours because, thought leadership can mean all manner of things in the context of asset management. Some people call leadership, but you know, what page do you scratch the surface and it's approach. Some asset managers have done a fantastic job of raising their brand, but by doing true blue sky thought leadership. That actually engages the inclines in the issues that God, rather than being totally product-centric and calling it thought leadership. I think again, that comes back to the marketing and the communications and the digital aspects. There's some great kits on the market that can actually on the websites, helps kind of thought leadership, launch tracking results, and actually, if people are reading it, give that potential leads back to the sales teams. So again, marketers can play a really leading part in the content pipeline, making sure that clients get what they want, but also feedback through CRM platforms to the sales team to say, who's read my piece, which allows them to follow up specifically. So I think content particularly in pandemic has become almost a real differentiator in a sense, I think, lifting the brand.  

Mark: Yes, it's interesting. And it's amazing because it's taken this pandemic to really get a focus on everything that everyone's doing on an organisation, because a lot of them can't do it in the same place anymore. And I think it comes back to the marketing budget. If you've been investing in your brand, you know what, when you hit the pandemic, you can maybe take out the budget this year, cut it back 50%, and next year you can go back to the early levels. If you've been building brand, you've built that good will, because at the end of the day in a crisis, every part of the business has to give something. If you haven't been building your brand and then you cut everything, you can be in serious trouble. And some of the great brands, Neil and Martin, you've worked on too in your careers; those are companies who've invested a lot and have the momentum behind their brand, which is really important.    

You say those names and you show up and right away it says something about the individual representing that firm and who you're dealing with from credibility and integrity point of view. And Neil, just as you were mentioning now, that's so important from that content piece and thought leadership piece to generate warm leads. At the end of the day, that's what we're all trying to do, is bring more business into the firm. So, I think there's some people who do it very well, but on the whole, is there a lot of room for improvement across asset management industry, you think?  

Neil: I think, yes. I think Martin and I both worked in organisations where asset managers I think, particularly the front office, they call it academic, and they love to write lots of things that are very complicated and full of jargon, and then send out to their clients to say, look, aren't we impressive. Now, that's perhaps a bit scathing. But I've done a couple of projects recently where we've done, you know, the reading age of some of the literature that's come out of asset managers. And the reading age of Upay consumers probably, I don't know, 14 or 15 year-old at school, whereas the academic stuff is post-graduate. It automatically turns people off because they get to page two and they've lost it. The real skillset I think that's possibly missing in fund management kind of content or investment marketing teams is the ability to write complicated asset management text from a kind of a consumer's perspective. Everyone wants to kind of raise the bar to say, I'm really academic, I'm very clever, but the real skillset is the technical stuff - making it accessible and understandable in a sense in plain English. And that's where I think the industry has got a lot of room for kind of improvement to make it just more readable and understandable.  

Martin: Yeah, I guess the silver lining to that is that traditionally, the people who generate that content - often these people have brains the size of a planet, it's got to be bright people. But possibly, the ability for the communication channels that work best in terms of actually reaching prospects and clients. And it's not necessarily about dumbing it down, but it's really tailoring the content for who's the end consumer and the channel that they're consuming it through. You know, how you deliver through a white paper led conference or round table, which maybe you did two or three years ago, is very different from a zoom call with 20 people who were trying to sort of shake a four-year-old child off their left leg whilst listening to you erudite about a particular point. So, I think it's the content, but it's also a channel that you'll deliver that content through, and that's in constant change, constant flux. So I think having people who are content generated, relate it people who are channel experts makes a lot of sense to me  

Neil: Coming back to the content, and obviously, historically, people have been saying perhaps PDFs and attachments. And now, because it's all gone digital, people perhaps during the pandemic have got more time to read, but it's the delivery mechanisms. And we're coming back to kind of the toolkit for digital, you know, there's eBooks, other material. Following on from what Martin was saying about content, I think it's probably quite important to make sure that asset managers get the basics right, particularly around the sales team support. I know we've said that sales are always very keen to get thought leadership, but I've worked in many organisations where the exciting thing is thought leadership. Sometimes an audit of what's available at different levels, you know, people need pitch books, people need fact sheets, people need sales aids. Getting that right is the building blocks and then getting onto the respective thought leadership pieces that can really make the difference to the brand, but you've got to get the basics right? Sometimes the marketing kind of don't necessarily like to deal with that stuff, but the sales teams can't operate without the basic building blocks for engaging with clients. And again, pandemics have really put a change in the mechanisms and the structure of that content to make it more readable and accessible.  

Mark: I think that's a great point. A couple of issues, one on the tool kit for sales, right? You're in marketing, that might not be where the glory is in terms of, 'Oh, look at what I've done', but that's where the rubber really hits the road, right? Because a salesman/salesperson is out in front of somebody trying to close, and they've got that right piece of... I hate this word, but it's true... collateral to put in front of them or follow up at the right time; that can make all the difference in the world. And it might be, here's a great article we put together or whatever, but that is so impactful at that time. That is where a lot of the value of marketing need needs to be focused to make sure that that works. They need to talk to the sales team and say; is this stuff really working or is it perhaps too generic?  

And I guess one other comment I'd like to make in terms of great communicators, and we've seen this during the pandemic in different countries around the world. We've had leaders who've come out who you don't know what they're talking about and can't explain what needs to be done. We've had other leaders in the government as a whole who've come out and have been able to articulate very clearly in a manner everybody gets what this complex and challenging issue we're facing is. So, I think you're right about that. That's a challenge, especially in asset management industry, a lot brain power there, and used to working on particular aspects and finding really deep truths, but you've got to be able to come back and communicate that. So, why don't we use that as a good opportunity, because why are they trying to communicate? They might be trying to communicate about the product and the product agenda and what's being constructed and made there. So Neil, would you like to give us a bit of an update on some current or emerging trends in the asset management industry with regard to the product agenda?  

Neil: Yeah, there's probably two or three key themes. We're probably on the back of a cycle that plays very nicely to your "it's too complicated for me to understand". It's the multi assets fund flows into kind of what used to be called balanced or mixed, but a lot of fund managers have, and they're quite good at kind of really varying all kinds of product names. The multi-asset space has pulled in billions of pounds, but some of the product is very complicated with derivatives, multiple correlations between asset classes, and to explain that to the retail investor can be quite difficult. And there's an area that I think throughout product, the regulator is another area that marketing have to be very, very closely aware of what's going on. These products are very complicated, and if you're selling to a retail investor, it can be another skillset of being able to do that.  

So multi-asset has been a trend that in a sense has probably peaked out; the really big one is ESG or Green Funds or Social Responsible Investment. I think it's... I've been through a couple of cycles where it was SRI, Ethical Funds, but this time, it smells and feels a lot different. On the way up or everyone is very happy for, to invest in funds that are potentially outperforming because of their investible universe is good and the stock pick is good; on the way down, everybody seems to forget it. I think that's different now where a lot of fund managers are primarily because clients are pushing them to do this; they have to embed ESG in their processes and funds. I think, there is a well-known kind of commentators are suggesting that, but in the five years' time, all funds launched and being managed will be ESG related.  

Now I think the trend, I think asset management has certainly jumped on the ESG bandwagon and is making everything as green as possible. I think there's also a danger that perhaps they could make it almost, you know, you're saying things that you can't necessarily back up. So the asset management communication particularly, and the product development teams have to be really careful how much play they do play on the ESG basis. But, it's hitting all client groups. Historically, the local authorities, the Nordics and the Dutch clients, institutional clients have been very, very ESG orientated for years, but literally because of the UN initiative, Paris Accord, a lot of other institutional investors and retail investors are now pushing their fund managers to launch products. And I think there are various reasonable variations of adoption.  

I think the UK, Europe has been very good; Australia has been very, very good at making these changes to their process. North America less so, and the Far East are probably way behind it and actually recognising that there is a need in a sense to save the planet. Obviously, the other trend on product is active and passive. The passive funds, ETFs, et cetera, have had a fantastic run. I think probably 20 years ago, it was probably 5% of assets under management. Now, certain countries, you know, it's 50% of new businesses going into these vehicles, primarily because of fees coming down. But again, the risk space for active asset management, I think in any new recovery, and it's certainly been proven since the bottom of the market this time last year. Active managers have consistently outperformed in any strong market recovery.  

So there's the active-passive play, there's the fees play, and the ESG piece isn't going to go away; it's only going to get bigger. And from a marketing perspective, it's quite tough to kind of communicate around ESG and what you're doing. And the regulator is pulling in, literally, making rules and regulations to make sure a fund manager, when it reports to clients, there are certain criteria and it has to report, and that's quite tough for marketers and communications teams and reporting teams to prove what the regulator is asking them to do.  

Mark: Yes, great communication.  

Martin: Yeah. I mean, to add to that Mark, I'd say that in terms of that challenge for marketing, I think, sort of echo what Neil was saying in some ways when it's on the up it's a comfortable place to be. But when it's on the down, organisations need to look at their communication and how they sort of present these propositions to the marketplace with a degree of maturity in terms of being clear to people what the price is that they're paying. If you're investing for something for ethical reasons and to gain an investment return, if that investment returns starts wobbling, are you're holding onto your ethical credentials. Again, as the stuff that have washed across the world, you know, greenwashing is one of the things that will be pushback on providers in terms of how deep is your ESG program. But again, in terms of opening asset management to new markets, new segments, it's a fantastic opportunity, but it has to be built on solid foundation.    

Neil: That's a great point you made about the lifecycle. Asset management is all about accumulation. The de-accumulation phase, fund managers are only just getting to grips with really clear communication across the whole of the business regarding retention. And it comes back to that active asset managers are under pressure to retain business, the communication to existing clients and new clients, perhaps that's separate. Should it be consistent, or should you have to work harder with clients that you've already got, or should you be going after new clients at the expense of retaining the business you've got? So, there's a life cycle there that I think fund managers certainly in the active space are having to work really hard to retain assets, and the comms becomes even more critical to that.  

Mark: Absolutely. I think with ESG, we were working with a group about a year and a half ago, and they were telling us that there's 400 different metrics on ESG at the moment. So one of the key issues with it is what really qualifies how do you assess it? And I'm sure that's tied up a bit over the past couple of years, but we're also in China with some leading members from the city. And there was a lot of interest about ESG, and I think one of the other dynamics that the industry is facing is, China now has a very big domestic market, and everybody wants to participate and they've opened up to a degree. And whatever you think at a higher political level, the Chinese economy is becoming as important as the US economy.  

And they are going to start to influence; I would think some of the changes and how we interact and the type of products that are sold, because they are much more digitised than a lot of the economies in Europe and certainly North America. Neil, I don't know if you have any knowledge of the environment over there and some of the trends that you're seeing, or you see a lot of products just being transferred there in their current format and not a lot of feedback coming from the...    

Neil: As you say, it is going to be a massive market, but some of the asset managers are non-Chinese, certainly the US, the names, big names and European names have been getting into China for 20, 25 years. It's that kind of time horizon. The regulation is torturous to get a product in particularly for the Chinese retail market. So you've got to have deep pockets and be recognised that I think... it is easing up slightly, but I don't think an asset manager can... a non-Chinese one can actually have its own company; it's got to be aligned or kind of very closely to interest. I think the Chinese market is a massive one, but I think due to regulations, it's going to have to be a long play.    

And sometimes brands do not transfer. I mean, I worked for a kind of Scottish widow as a brand 20 years ago. To put a Scottish widow into China would be very, very difficult from a brand perspective. So, sometimes these things don't transfer particularly well. But obviously, the Chinese market... certainly the retail market, funny enough, a lot of the Chinese fund managers are actually coming with their skillsets and products into London and New York, so that the transfer of skillsets is coming both ways. They have some good fund managers that need to be recognised by the new entrance into the Chinese market, but they do have their own skillsets. It's a tough market and the regulation is slow to change to allow for our managers to become key players, I would think in my conclusion.  

Mark: Interesting, but as you said, some of those individuals and firms are now coming and participating in the UK and the US markets, and shaping and learning and have a strong domestic market, so interesting. Very competitive times ahead I would think, continues.  

Neil: Yes.   

Mark: So, why don't we just talk a little bit about culture because at the end of the day, I think it was Neil... sorry, Peter Drucker. It could have been Neil Drucker... Peter Drucker said culture eats strategy for breakfast. So, what about the culture within the asset management industry and the emphasis, the board and the CEO, as well as the regular interest in that?  

Martin: Well, I think certainly in recent years, the regulator has been making a lot more noise around this particular topic. I mean, culture is notoriously difficult to articulated and nailed down. It's something that you feel. And again, in a sort of COVID world, actually makes it more difficult to manage a culture because there's less human contact. But I think the regulators have asked serious questions of not only asset managers but the financial services industry as a whole, in terms of defining its culture. Because when things have gone wrong, often it because of those sorts of issues, but the interest of the customer are subservient to the interests of the organisation or a sales target, and behaviours get influenced accordingly. And I think a lot of what we've talked about today, there's a golden thread running through in terms of the culture of the organisation. And I think marketing should be a voice at the table because if marketing acts as the voice of the customer and the customer interest is at the heart of the organisation, hopefully fewer things go wrong.    

Neil: Yeah, I think culture covers all manner of things. I think even from a retention perspective and even from a recruitment perspective; culture's becoming critical for the asset management industry. Mark, you mentioned, I think as did Martin, the regulator, and I've been working on a couple of, and certainly in the UK market, the assessment of value, the regulator is going to come and kick the tires hard and serves certain areas to prove that asset managers are adding value, and a key component of the regulation is culture. As Martin mentioned, how do you prove culture, you know, client servers are okay, but actually, it's more on the DNA of the business. How do you actually measure and prove that actually what you say is... what's under the bonnet is actually what marketing might be creating a fantastic brand perception, but actually underneath it, is the client really at the centre of everything?  

But as Martin said, the regulators are looking long and hard at the asset management industry, during the global financial crisis, it was the investment banks who were really under the microscope. I think it's now the term of the asset management industry and wealth management industry to actually almost go through the same principles or kind of issues with the regulator to prove that they're actually adding value. So it's quite important that we kind of address that. But you know, culture is one of those things, it's like Scottish mist; you can't touch and feel it. You got to feel once you go into an organisation that there's good, bad or indifferent, but it's got to be led from the top, I think, and the values of the CEOs and the boards will filter down to the rest of the organisation like any other sector, to be honest.  

Martin: It has to be led by leadership. I've been interestingly going in and feeling the culture, actually sometimes easier from the outside than from the inside. It's a bit like the sort of the frog in the boiling water; once you've been there a while, you just acclimatised to that culture. And I think you're most sensitive to it as a sort of new entrance to an organisation, or if you're adjacent to the organisation, you know, if you're an advisor, a consultant, a provider of advice; sometimes it's easier to get a sense of that culture than if you're in it for a long, long time.    

Neil: I think one issue that probably most sectors, and I'm not that familiar with other sectors outside financial services asset management, there's been a lot of mergers and acquisitions. And some firms, they've had a really good culture and they merge or acquire another fund manager, and those we'll take the best bits of both cultures; that can be quite dangerous. I mean, the culture, you're not going to be able to retain the culture of both. As more and more firms are taking over, to me, sometimes culture is talked up, but perhaps in reality, it's much more difficult to retain the good bits of both parts of any business that you merge or acquire. The acquirees are probably going to be the dominant culture perhaps, but sometimes that's why, so I think that the boutique model is quite attractive for certain kinds of fund managers. They like the ability not to be kind of embedded into a monolith that the kind of the culture can go right during acquisitions, but that's going to happen more and more over the coming years due to scale.    

Mark: Well, it's obviously a time of change for the asset management industry. There's a lot of significant challenges that we've just been talking through today. The sales and marketing organisation, how that relationship is changing and the drivers and the value add the importance of that marketing toolkit, the MarTech stack that supports it, but really making the sales team have all those sales aids that they need to close things. The importance of brand and communication and thought leadership on the content is high up there. Product always core, right, at the end of the day, great brand, but you've got to have a differentiated product. And as we've just been talking about a culture, you know, is huge and probably has become more so during the pandemic when everybody's not showing up together. And that's when you really see what type of culture you have and the behaviours and values that the firms live by. So, thank you Neil Fatharly and Martin McGovern for joining our 'Things You Should Know to Make Your Business Grow' podcast today. It's been a really great conversation, and perhaps down the road, we can come back and revisit this in six months and see who's been very successful in making some of these early transitions as we move out of the pandemic into the new normal, vaccinations included. So thank you very much both for your time today.  

Martin: Thank you.    

Neil: Thank you. 

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