“A revolution is coming - a revolution which will be peaceful if we are wise enough; compassionate if we care enough; successful if we are fortunate enough - but a revolution which is coming whether we will it or not. We can affect its character; we cannot alter its inevitability.” 

-Robert F. Kennedy

In brief

• To survive in this environment, asset managers must do more with less and gain efficiencies across the product lifecycle.
• The biggest key to success is unlocking the power of data. Data is critical at all stages of a business maturity model because it presents an opportunity to increase efficiency and lower costs.
• The world is digitally transforming, and the next generation of investors are digital natives. Traditional distribution strategies are seeing diminishing returns; asset managers need to embrace digital to complement traditional sales approaches.
• The rise in popularity of the exchange-traded fund (ETF) has led to a proliferation of product offerings in the marketplace. To stand out, asset managers must lower costs, create products that generate higher alpha, or zero in on unique investment themes.

The product evolution through product revolution

To truly understand revolutions, you must step back and understand history to see how every moment is steeped in what came before.

Once reserved for the elite, investing has become increasingly democratized over the past century. The earliest forms of investing began with the trading of various commodities and debt. The creation of the forerunner to the S&P 500 in 1923 was a massive revolution in investing. It introduced a tool to track broad market performance rather than simply individual stock performance – which provided investors with something to measure individual securities against.

1. BCG’s Global Asset Management, May 2023. “The Tide Has Turned.”