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Behavioural changes present opportunity for US asset management industry growth

Behavioural changes present an opportunity for asset management industry growth, according to the latest research from Cerulli Associates.

"Despite the maturity of domestic asset management, there are opportunities for continued improvement," says Bing Waldert, director at Cerulli. "The market has led the way in themes such as open architecture, the separation of distribution and manufacturing, and employer-sponsored retirement plans."
In the August 2014 issue of The Cerulli Edge – US Edition, Cerulli examines the ways in which industry participants try to influence the behaviour of the individuals involved in the market with the goal of producing better outcomes.
"Salesforce coordination places the greatest demand on sales organisation resources," Waldert says. "Asset managers with a retail third-party business are adapting their salesforces to be more professional and better aligned with the firm's interests, rather than focusing solely on top-line sales."
"Compensation remains the best way to influence salesperson behaviour, but radical changes to salary and benefit plans must not be seen as standalone solutions," Waldert says. "Sales management must clearly and consistently communicate the reason and importance of changed wholesaler behaviour and how it supports the firm's ultimate success."
Cerulli's research shows that for the vast majority of asset managers, wholesaler compensation should to some degree be based on gross sales to avoid muting wholesalers' entrepreneurial spirit, and that radical compensation changes outside the industry norms can threaten wholesaler retention.

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