Many U.S. asset managers are seeking to “emulate” firms that convert data into strategic insights that help them win business, according to Cerulli Associates.
“In the age of big data, the ability to mine a constant stream of information and research databases is table stakes for most major asset management firm in the U.S.,” Cerulli, a consulting and research firm, said in a report Monday. Eighty percent of those surveyed by the firm said expanding data analytics to improve sales was a priority — with half identifying it as a “major priority.”
Firms like BlackRock and Fidelity “lead the way in terms of the large data teams they employ,” Cerulli said. Ninety-six percent of firms with at least $20 billion of assets have data analytic teams, the consulting firm found, noting that Goldman Sachs Group and Legg Mason in 2018 created chief data officer positions.
“It is clear that there is a sea of information at these managers’ disposal,” Cerulli said. “Most firms are in the early stages of implementing processes with regard to how to best leverage this data in their broader distribution strategy.”
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Asset managers that buy advisor data from broker-dealer partners spend between $30,000 and $800,000 on packets, according to the report. “As distribution teams become more adept at converting data into strategy insights, there will be both continued improvements in quality and shifts in the pricing of data packages,” Cerulli said.
Morgan Stanley last year announced it was lowering the maximum cost of its data packets to $600,000, according to Cerulli. The quality of data packages can vary “considerably” from firm to firm with respect to the details provided and their “digestibility,” the consulting firm learned from its survey.
Asset managers are trying to identify trends in asset flows and “conversion rates from emails to meetings” the way large firm do, according to the report. “Data-intensive shops have long been known for their ability to quantify the cost effectiveness of activities such as email campaigns, phone calls by an internal wholesaler, and meetings with an external wholesaler or portfolio manager,” Cerulli said.