When it comes to personalisation, even relatively small touches can make a meaningful difference.
Increased competition amid industry consolidation is leading many asset management firms to move beyond being simply building-block fund providers and into the realm of personalised solutions, designed to increase customisation and deepen partnerships.
But a fixation on delivery mechanisms, framed as bespoke versus model portfolios, means the question of what a client actually needs personalised is rarely asked, according to Alex Funk, CEO at PortfolioMetrix.
Model portfolios came into being because, for a significant segment of clients, financial planning goals simply required a solution that could be delivered by a well-constructed portfolio or fund, explained Funk.
"These portfolios are built to achieve a stated investment objective; every client in that risk profile receives the same outcome. That is not a limitation, that is the point," he said.
The CEO added further personalisation at the portfolio level "adds nothing of value" if the outcome realises the financial plan.
Despite this, Nataline Terry, head of EMEA distribution at T. Rowe Price, said the asset manager was seeing increased demand for the co-creation of mandates and customised solutions.
"It truly is no longer just about track records; it is about an asset manager demonstrating it can be a strategic partner and add value beyond performance," she asserted, while recognising that fee pressure remains "intense" and price "will always matter" when it comes to competitive advantage.
Product development is also evolving, Terry added, with growing interest in strategies that address the challenges of current markets.
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Many clients have showed concern about elevated concentration risks in equity markets and the reliance on a small number of holdings within passive products, she continued, driving increased demand for enhanced indexing solutions able to blend the best of active management with systematic approaches.
"Fortunately, our industry has professionalised, and this has changed the role of relationship managers. While personal connections remain important, the role is now much broader, requiring an understanding of a client's true needs rather than simply selling a fund," Terry said.
In questioning how real personalisation is in practice, Michael James, technology practice director at Simplify Consulting, said even relatively small touches can make a meaningful difference.
"My father‑in‑law, for instance, has remained loyal to the same adviser for decades, largely because they greeted him by name the moment he called," he said.
High‑quality data can underpin long‑term planning and foster a lifelong client relationship, while AI will be capable of recognising subtle patterns or predicting major market shifts, helping wealth and asset managers to anticipate and optimise client portfolio, James said.
Meanwhile, the next phase of personalisation lies in data enrichment through external sources, the tech practice director continued. Integrating live weather or flood‑risk data makes it possible to warn customers of local dangers at minimal cost, for example.
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"While we may not be as unique as we like to believe, personalisation can be critical at certain life stages, offering reassurance, relevance and meaningful value when it matters most," he explained.
Nevertheless, PortfolioMetrix's Funk said that direct indexing and sophisticated overlay tools do not resolve the question of what truly needs personalising. Rather, they make it easier to answer it "badly, and at scale".
True, authentic and accessible personalisation unlocked by sophisticated data and new technologies also comes at a cost, added RBC BlueBay CEO Erich Gerth.
Building and maintaining a solution, and ultimately personalisation, for clients requires continued access and communication with key decision-makers from the C-suite, understanding behaviours and anticipating specific needs.
This includes formalised process-driven feedback loops, access and a strong understanding of specific client issues, requiring a behavioural shift in asset managers who have become adept at the "old world" of selling products, Gerth said.
Although deep personalisation in asset management is inevitable, continued evolution as a business is required to deliver it. The ones that get this right will be those that start with a clear framework, Funk said.
"It requires investment managers to agree where the planning conversation ends, and the portfolio decision begins. Getting that boundary right is where the real work lies," he added.
