October 31, 2023 | Stamford, CT — Asset managers looking to get off on the right foot with new institutional clients should work to shorten contract negotiations and streamline processes for asset transition, custody set-up and KYC/AML compliance.

Asset managers in the U.S. and Canada are investing heavily to upgrade client service capabilities in areas that focus on technology and customization and enhance the service model they provide to institutional clients, based on discussions in North America as part of research conducted globally by Coalition Greenwich. These improvements have taken on increased urgency over the past decade, as investors’ growing preference for passive investment strategies and falling fee levels have pressured active managers to demonstrate the value in all facets of the engagements they provide. 

“While investment performance will always be the ultimate determinant of client satisfaction, asset managers who excel in client service build stronger relationships with institutions, which can limit client and asset attrition in times of challenging performance,” says Todd Glickson, Head of Investment Management – North America at Coalition Greenwich.

Addressing Pain Points 
Asset managers working to enhance client experience should elevate the onboarding process, bringing the totality of the firm to bear in an efficient fashion, which can set the tone for the entire relationship. New research in North America from Coalition Greenwich identifies the “pain points” that asset owners say most frequently arise to cause disruptions during onboarding. At the top of the list are protracted contract negotiations, cumbersome processes for asset transition and portfolio reconciliation, delays in custody set-up, and annoying KYC/AML documentation demands. 

“In many of these areas asset managers now have access to technology solutions that can help eliminate inefficiencies and make the onboarding process more streamlined for clients,” says Todd Glickson. 

The research also examined other contributing factors that influence the client experience and help determine client satisfaction with asset managers. Nearly 80% of institutional investors in the U.S. and Canada indicate that team changes from their asset management provider trigger a manager review. With large institutions more sensitive to team turnover and risk and return profile changes, asset managers should anticipate client reactions and manage communication proactively.

Based on those findings, Coalition Greenwich advises asset managers to prioritize continuity and visibility of the investment professionals and portfolio specialists that engage with clients in both periodic and formal meetings.