Wednesday, May 4, 2016 Stamford, CT USA — Intermediary distributors of investment products in every major region around the world expect to see increased demand for multi-asset products from clients on their platforms.

Continued growth in demand for target-date funds and other types of multi-asset products is one of the key findings of a new Greenwich Report, Drivers of Success on Intermediary Fund Platforms, from Greenwich Associates. 

The report highlights the findings of a study conducted with the global heads of fund selection at dozens of leading intermediary platforms, and 379 regional and local fund selection decision-makers to learn how asset management clients win assets on the intermediary distribution platforms of broker-dealers, private banks, insurance companies, registered investment advisors, and defined contribution retirement plans. 

Future Investor Demand
Gatekeepers for global fund distributors say challenging investment conditions and volatile markets are altering investor demand and shifting asset growth in the direction of innovative products, high-alpha and portfolio-wide solutions. Based on the study results, Greenwich Associates projects the following trends in investor asset allocation and product demand:

  • Multi-Asset Boom: Three-quarters of gatekeepers in Asia expect investors on their platforms to increase allocations to multi-asset products, including target-date and target-risk funds, with European and U.S. gatekeepers not far behind.
     
  • Equity Investors Going Global: As the quest for better risk-adjusted returns continues to push investors beyond their own borders, intermediaries expect strong demand for international/global equity.
     
  • Declining Demand for Domestic Fixed Income: Investors expect interest rates to start rising more persistently. When they do, investors are worried about their ability to generate gains in fixed income while also protecting capital. 

Deeper, Stickier Relationships
Gatekeepers’ demands for closer relationships with asset managers represent a challenge for those with legacy business models built for pure product sales. However, this secular shift to deeper, more expansive relationships may provide new opportunities to managers willing to adapt to changing times. 

“We see relationships becoming more concentrated as platforms shorten manager rosters,” says Greenwich Associates consultant Davis Walmsley. “As such, deeper, stickier partnerships are no longer simply nice to have; they are essential to the future success of the business.”