Simplicity, Trust, Opportunity, Low Cost Air Travel and Data Quality – what’s this got to do with the future of fund management?

This is the first blog published by guest contributor, Jason Cooke – VP Product at MoneyMate

In a previous blog Making the most of your data, Ronan wrote about how he was finding that the stakeholders in data management projects have changed from technology to predominantly the business.

When I attended the IEA’s 13^th Annual Conference on The Future of Fund Management recently this viewpoint was shared, with many of the speakers talking about how the industry needed to focus on the end customer and work with the current and pending regulations to re-establish trust with those customers, especially after the fallout of 2008 which saw the reputation of the industry being badly damaged. This focus on the business of servicing the end customer led to some interesting thinking around how funds need to be presented.

Rupert Todd (President – Investment Services: T. Rowe Price International Ltd) spoke about the proliferation of investment products that has sprung up in Europe and Asia and how this added to the air of complexity about funds to the end investor. One of the key messages from this opening address was that funds were ‘not simple enough yet’.

Throughout the day this continued to be a key theme where various speakers spoke about the iPad generation which expected all the complexity to be delivered in a simple and easy to understand package.

But bringing in simplicity is only part of the story – another key element was building trust through transparency. Making things simple does help bring transparency, but can it bring about trust?

Yes there is a need for fund managers to know their customers and be able to engage with them in such a way that they are seen as trustworthy. A strong element of this is focussing on the end user and ensuring that the data being given to the end user is of sufficient quality and accuracy to help the fund manager connect with the end user.

So where do regulations come into play? Does the fund management industry see these as a burden or an opportunity? Karen Hamilton of Northern Trust gave a clear picture of how the industry should see this as an opportunity to reassess tactical approaches and put in place good governance practices to ensure asset safety, transparency and ultimately investor protection.

When trying to look at how this focus on simplicity, trust and opportunity was going to affect the future of fund management, parallels were drawn on how the airline industry changed with the introduction of low cost carriers that not only made air travel cheaper but also reduced the complexity of buying a ticket and gave greater transparency on how charges are broken down. This has changed the perception of how people view air travel and now air travel is easy to understand and is accessible to all…and perhaps more importantly, it helped break the perception the large established carriers had of air travel and they have had to change to survive. The point was well made and understood on what the funds industry needs to do.

To return to Ronan’s earlier view that the stakeholders are changing to the business, he also highlighted that access to and usage of high quality data was necessary to improve client service and customer experience. Given that a direct movement to promote simplicity, transparency and a regaining of trust was being suggested as compulsory to the future of fund management by the speakers at the IEA conference, it’s clear to me that there also needs to be a renewed focus on addressing data quality to help simplify information, regain investor confidence, restore transparency and ultimately underpin the success of the fund management industry.