To prepare and accommodate the downward pressure on the fees they charge, asset managers are exploring technology and rethinking their third-party relationships as they move toward new fees.
So says Aanand Venkatramanan, head of ETF Investment Strategies, Index Funds at Legal & General Investment Management (LGIM), who was interviewed by FTF News during FTF’s Performance Measurement Europe 2019 conference, September 25-26, 2019.
“In my view, competition is here to stay and there’s a lot of fee compression that we are going to witness in this industry,” Venkatramanan says. “With that said, with asset managers and insurers like us, we are going to enter into a regime where there’s going to be more and more fee compression. In order to remain profitable in that environment, we need to invest more in technology.”
Asset managers will need to work more with third-party providers such as custodians, IT providers, software vendors, administrators and legal firms “to see if there is any scope” for cutting costs, Venkatramanan says. “But I think, leaving any third-party costs aside, technology is going to play a very vital role in the asset management world. So, investing more in technology making sure that your portfolio management costs your attribution and all those come down would be key for the survival of any asset management firm going down a decade or so.”
During PME 2019, Venkatramanan took part in the “Fees Under Pressure” panel via the Etc. Venues Monument location in London.
CREDITS:
Videographer: Timothy Foster Photography & Film, www.timothyfoster.co.uk
Video Production: Janene Knox
Interview conducted by Eugene Grygo, chief content officer, FTF News
Co-Producers: Sarah Hathaway, vice president, Financial Technologies Forum (FTF) and Grygo
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