After a difficult 2022 where equity mangers experienced a 20%+ decline in AUM, many asset managers have turned to expense rationalization to regain firm profitability. With expense reduction in vogue, headcount becomes the primary chopping block. Unfortunately, since many smaller firms are owned by portfolio managers, the portfolio/research team responsible for the manufacturing process stays in place. Instead, it’s the client facing sales and marketing professionals that are often the victims of expense reductions.
Why compromise your pipeline and jeopardize future business growth? Be different. Be on the offensive. During periods of market turbulence take advantage of peers reducing their visibility to strengthen your competitive advantage. Market with greater frequency, hire quality, displaced sales professionals and set the stage for future asset growth.
Always remember that the larger asset management firms invest in distribution regardless the market environment. Protect your market share or, better yet, grow your market share from smaller competitors that often retrench their distribution efforts during periods of market decline.