Transforming of Investment Management Firms During Challenging Times

By Michael Patanella & Johan Joseph, Grant Thornton

Volatile capital markets, changing demographics, technology disruptions and increasing competition to capture investment flows confront many, if not all, of the players in the investment management ecosystem.

Institutional investors, money managers, wealth managers, registered investment advisors, broker dealers and retirement services providers are facing pressures to get bigger as scale efficiencies continue to rise with assets under management. It is no wonder that so many players have embarked on enterprise transformation programs to repurpose themselves for more effective asset capture and service. Yet many transformation programs have experienced mixed results and, at times, have failed to deliver on the promises made at the onset. 

We have seen how some investment managers have distinguished their transformation programs from others, reaping benefits where others have not. Our clients’ experiences reveal that successful transformation programs are disciplined in their strategic alignment of goals and execution — we call it “getting the right things right.” This simple slogan is about structuring the transformation portfolio to comprise the “right” set of initiatives, sequenced and managed over the delivery horizon. This is easier said than done.

Get set up for success

“Getting the right things right” begins with including the correct set of initiatives in the transformation portfolio. While the correct set varies from one organization to another, we have seen that most successful programs consist of the following categories of initiatives:

  • Stakeholder experiences. The strategic alignment begins with prioritizing key outcomes against the prioritized stakeholders that can affect the outcomes. For investment management firms, common stakeholders include:
  • End clients (institutions and/or individuals)
  • Intermediary partners, including investment consultants, broker dealers and registered investment advisers
  • Regulators, including the SEC, FINRA and the Commodity Futures Trading Commission
  • Vendor partners
  • Employees