Bill Hortz's picture

[The asset management industry is at an interesting crossroad facing major waves of change. One study by Indefi projects that five secular transformations will be reconfiguring the industry and changing established wisdom that has guided business decisions for decades

• globalization trends will refocus to local • expanded investment toolkits including digital assets will blur public and private asset classes • AI to achieve a tipping point reshaping investment and distribution functions • returns will be refined to non-financial alpha like ESG/Impact or retirement income certainty superseding peer rankings and benchmark-relative returns  • individual investors will dominate over institutional channels with retail channels growing from 45% in global AUM in 2014 to 67% by 2030 and the institutional channel dropping from 35% to 26% by 2030

These are massive changes that will spur ongoing innovation, particularly in fund distribution. The latter fact of individuals dominating the futurealone could disrupt the distribution efforts of many asset management firms. However, there are additional vectors for consideration as well. Thedramatic increase in investment options, combined with fee pressures, and the continuing growth of smaller independent RIA firms coming into the market have created a challenge for asset managers to do more with less. And while we see some of the major firms start to address these challenges with digital advertising, practice management tools, and major investments in data and data feeds, many challenges remain.

To better understand ways to address some of these frictions inside modern asset management distribution, and how firms can adapt, we reached out to Institute Members Jack Swift, President & CRO and Erez Yereslove, COO/CMO, Asset Management of TIFIN — an AI-powered FinTech company that leverages data science, investment intelligence, and technology to help deliver engaging and personalized investor experiences. They just announced their new SaaS solution aimed at combining marketing, data science, and sales enablement capabilities to drive more intelligent distribution for their forty-plus partners in the asset management industry.]


Hortz: What was your motivation in launching your new asset management distribution platform? What are the industry challenges that you are specifically working to solve?

Swift: My observation over decades-long experience as a leader in the asset management category, and what we have heard from over 45 of our current asset manager clients is that while they receive significant amounts of data through the purchase of data packs, they struggle to process and analyze the data in a way that is useful for their sales and marketing teams. While some of these larger asset managers have data science teams and business intelligence teams, many do not. TIFIN is bringing business intelligence to asset manager distribution.

Yereslove: Marketing teams and sales teams tend to operate in silos and fail to share information necessary for learning. This is an experience I have seen first-hand as CMO in and outside of the industry. In response, we have built an intelligent approach to asset manager distribution bybringing artificial intelligence into every aspect of the sales and marketing process to drive awareness, generate signals, and nurture prospects to significantly increase the probability of closing. We saw the opportunity to leverage modern AI/ML techniques to provide an AI-driven distribution edge to our partners. 

Hortz: How did you approach those challenges? What was your thinking behind your first steps in tackling these issues?

Swift: Our first steps in tackling a new intelligent approach to distribution in asset management was to build a natural language driven search engine called Magnifi. It took us a year to generate the first 1 million search results at Magnifi. Today we generate 1 million results every 3 days! The searches by advisors and self-directed investors generated tremendous amounts of data that allowed us to build a data lake, identify signals, and build algorithms to nurture those signals. Now Magnifi is over three years old and we have built TIFIN Wealth which is a container for advisors that enables them to work on their clients with risk tolerance, personality type, financial planning and charitable giving needs, among other things. With TIFIN Wealth too, we were able to generate significant amounts of data to train our models to build very robust intelligent layers to generate signals, distribute content, and nurture prospects. 

Yereslove: All of this is working on solving the issue of classic asset manager distribution which is particularly inefficient. asset managers cumulatively spend over $64 billion a year to distribute their products. They currently do this with little to no business intelligence being applied to any sales and marketing activity. The dating equivalent to this is going to the local bar and randomly hoping to meet someone who is a match for you. To further develop the analogy, consider that TIFIN brings in “intelligent matching” which is much more consistent with eHarmony, Netflix, Spotify, Stitch Fix, and many other modern marketplaces to the asset management space.

Hortz: What would you say is the key capability or differentiator to your modern distribution solution?

Swift: Our modern-driven approach to distribution brings an intelligence layer into each step of the distribution process. From discovering intent to building awareness to generating signals and to nurturing prospects,TIFIN's Asset Manager Platform (AMP) is bringing behavior data and intent into the equation. As a prior asset manager with billions of dollars under management, I recall how we and other such firms used data. The major difference in what we are offering, that I wish I had all that time ago, is the upgrade of data to actionable intelligence that translates to true business impact.

By monitoring and learning from the action investors are taking, the platform increases the accuracy of marketing and sales through a real time feedback loop. Unlike data packs from the past, TIFIN's approach is real time and intelligent, based not just on biographical data but more importantly behavioral and psychographic data - the actions that investors are taking each day, each hour, and each minute.

Hortz: Can you tell us more about how you provide practice management and distribution intelligence support?

Swift: Many of our asset manager clients are leveraging our practice management capabilities to deepen the relationship with their advisor clients. Putting an intelligent technology platform in the hands of their advisors allows advisors to grow their business quickly and efficiently. Advisors can use our practice management platform to prioritize prospects, nurture prospects through intelligent marketing, convert, and construct investment portfolios that combine personality, risktolerance, and planning all in one place. All of this, of course, is built on a backbone of intelligence at the intersection of artificial intelligence and investment intelligence.

We are offering our asset management partners the opportunity to provide value add tools to their advisor clients. As a data-first organization, those tools also provide insights back to the asset manager to better work with their advisor clients. 

Hortz: How did you design your technology to combine these capabilities into a problem-solving platform for asset managers?

YeresloveWe designed our technology with the needs of the end-user in mind. In our case, the end-user is often the investment advisor. By effectively serving the investment advisor and self-directed investorcommunities through our easy-to-use technology, we have built an ecosystem that provides valuable signals for the asset manager community seeking to match their strategies to the right advisor and investor needs. 

We build our software to be a seamless part of our client's workflow. We have CRM and API integrations so that our signals can be delivered in a frictionless experience. 

Hortz: Any advice or recommendations you can offer to asset management firms on how they can best prepare and develop the right mindset to address the distribution changes happening in the industry? 

Swift: Buying behavior has changed and it is not going to reverse course. Asset managers need to embrace the fact that the distribution model of the 80s, 90s and early 2000s has changed significantly. Today's self-directed investors and investment advisors expect a digital experience, but not just any digital experience - they expect personalization and relevance. Fortunately, TIFIN has built this technology and, for the asset manager industry, it provides an incredibly powerful way to intelligently distribute their products efficiently and effectively. The right mindset then is all about leaning into this new phase of intelligent distribution.


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