Distribution beyond the concepts of open and guided architecture. Partnerships will make the difference
Charles Jewkes, CFA , head of Global Wealth at Aviva Investors , dialogues with FocusRisparmio on the future of the asset management business. "Coherence and the ability to communicate the brand will be decisive. For a distinctly esg asset manager it will also be crucial for them to be able to provide clients with an experience that is in line with the preferences expressed in terms of sustainability."
"It is not sufficient to design an Article 9 strategy, what will make the difference is being able to also provide an investment experience that matches the expectation of a client who chooses this type of product."
When asking yourself how to make your offering distinctive in a crowded landscape such as asset management, looking at the individual pieces of the puzzle is not enough. This is the most important lesson that emerges from the conversation that FocusRisparmio had with Charlie Jewkes, head of Global Wealth?at Aviva Investors, a manager with great international experience who as of the second half of 2022 is in charge of the distribution strategy of the British house.
"One of the fundamental reasons why I decided to embark on a new career path at Aviva Investors five years ago so far," he explains, "is that the company is a leading asset manager with a distribution channel with ample opportunity for growth, as the majority of assets are managed in-house for the insurance company." "No less important," he adds, "is the fact that looking at the characteristics that can drive the success of a management house in the near future, we find a multitude of them in the company's DNA."
What are these attributes?
The first and fundamental one is the expertise, and its recognition, as a leading company in the field of sustainability. All the recent changes in the industry's reorientation towards a greater focus on ESG criteria have seen Aviva Investors among the pioneers. Some of the UNPRIs, for example, were drafted with concrete contributions from Group colleagues.
A demonstration of the importance to the company of the concept of macro-stewardship, which implies constantly working alongside governments and regulators to change industry dynamics. This means having a competitive advantage in business terms as each financial institution has specific sustainability goals in its business plans.
Let's get into the specifics of the changes taking place in terms of distribution dynamics. Is the need for increasing alignment with customer objectives only about sustainability?
Absolutely not. It is an all-pervasive change. We are dealing with a process of institutionalization of the retail market. Fifteen years ago it all came down to having a large sales team and a large distribution force to ground individual investors. The dynamic within financial institutions was the generalised widening of the product range to offer potential customers. A focus that led to constructing offer sets that were almost impossible to manage given their breadth.
领英推荐
What has evolved since then?
This distortion has been recognised by the market, which has moved sharply towards a rationalisation of the product range and above all towards the creation of strategic partnerships that focus on specialisation and expertise. Over time, the narrative has shifted from the concept of open architecture to that of guided architecture, and finally to partnership, understood as the desire to work side by side with those realities with which there is an alignment not only in terms of interests but also in corporate culture, as well as the ability to generate distinctive added value for the end customer.
What are the other fundamental evolutionary trends in the retail world?
Another dynamic that is changing is related with product structure. Think of the huge growth of sub-advisory and the obvious questions it raises in connection with brand positioning. This is an essential issue because the peculiarities associated by the market with an asset manager's brand are not just an issue of perception but a factor that can determine the destiny of a management house in terms of business.
Our goal is to position ourselves even more strongly as an asset manager specialising in active investment strategies which structurally incorporate the objective of sustainable transition. This applies to every asset class in which we operate and comes from a deep-rooted ESG philosophy that pervades the group's entire business, particularly in our engagement with the companies in which we invest.
How do you go about achieving this?
The most important aspect is internal consistency in the commitment to sustainable transition, which has to materialise at every level of the company. The ability to effectively communicate actions and achievements in this regard is also extremely essential. Returning to what has been emphasised about major changes in the industry, this is crucial while creating but also strengthening durable partnerships with all stakeholders.
A type of operational efficiency that should not be underestimated, which, in combination with regulation and the young track record of many Esg strategies, represents one of the fundamental challenges the industry faces in terms of sustainable transition, which also applies to everything related to reporting on non-financial impacts and in general to the investment experience conveyed to the client.
Finally, for 2023, what are your expectations? Which instruments will clients focus on?
In terms of strategies, the surge in commodity prices as a result of the return of high geopolitical tensions has increased the need for a transition of the entire economic system, especially energy. This will intensify calls for strategies to mitigate the impact of fossil fuels. We also expect a confirmation of the interest in real assets and in private markets in general. Finally, a surge in the demand for multi-asset absolute return instruments to mitigate the still sustained market volatility.