4 years later: Moneyball lessons learned

In September 2016, we published a post: Journey to 2020: Asset Managers using Moneyball lesson to grow. Now, just over 4 years later, we revisited the themes discussed in that article to share what we’ve seen and learned.

Moneyball lessons

Intelligent Distribution

We predicted that asset managers who are most effective at utilizing data to drive intelligent distribution would compete more effectively than their peers. This would allow boutique firms to survive in a hyper-competitive market by focusing resources on their niche market. Additionally, we predicted that large firms with intelligent distribution would gain market share and enhance brand reputation.

Today, asset managers agree that distribution is a data-driven game. We’ve seen some asset managers make strong strides at bringing data together and using it to intelligently target, convert, and retain clients. Still, as firms have consolidated and more data sources have entered and gained traction in the marketplace, specifically data packs, there is a struggle to effectively use and measure data ROI. Carmen Germaine wrote an article featured in Ignites, Data Bytes: Sales Teams Struggle to Use Analytics, that does a great job of articulating this challenge. We agree with Germaine that perfect is the enemy of good. Instead of taking a year or more to build something to get the data right, asset managers are looking to buy solutions that will get them using the data and seeing results more quickly.

Verdict on the prediction: On point, but firms are still struggling to get it right.  

Comprehensive Advisor Profiling

We predicted there would be a premium on “knowing your advisor.” Considering the DOL rules and compliance concerns that were new in 2016, we foresaw advisors continuing to specialize, focus on differentiating themselves, and move toward teaming with peers. The right target for one asset manager may be the wrong target for others. We forecasted that firms who would be most effective at building and maintaining comprehensive advisor profiles would excel at targeting advisors with a high propensity to buy. These profiles would comprise both traditional structured data (sales, asset, and activity information), along with unstructured data (behavioral and social information). Together, these types of data would provide a comprehensive advisor profile, which would help drive more effective segmentation strategies.

Asset management firms have gotten to know their target advisors much better. However, it’s not enough to “know your advisor”; firms need to understand what team advisors belong to, who the other members are, and what their roles are. Firms also need the ability to couple this information with other first and third-party data to present a complete data set, which will, in turn, allow the user to effectively activate data, analyzing it to identify the best segments and targets for smart strategies and products. Finally, it can be said that the asset management industry continues to lag behind other sectors in the ability to leverage unstructured and behavioral data.

Verdict on prediction: Right direction, but still lagging behind other industries.

Wholesalers as Educators

We predicted that, as firms improved upon targeting advisors with the highest propensity to buy, expectations for wholesalers would continue to increase. Prior to meeting with a wholesaler, an advisor likely has a shortlist of possible solutions and expects the wholesaler to provide a deeper dive into why their solution is the best choice. While developing a relationship with each advisor is essential, we forecasted that a premium would be placed on how much value a wholesaler could add by helping an advisor understand the proposed solution and how it would help clients. Firms with the most knowledgeable and respected wholesalers would outperform their peers.

There have been several changes in the industry and the world since this blog was originally published that have accelerated the evolution of distribution and the role wholesalers play, most recently the emergence of COVID-19. Asset managers have overwhelmingly moved to a digital-first approach, putting a significant focus on marketing and leveraging client-facing teams to provide more education, business support, and personalized service.

Verdict on prediction: Bullseye!

Turning data into intelligence

In the book Moneyball by Michael Lewis, the Oakland Athletics changed how they scouted and valued players. Using data, they were able to redefine the game and compete with the Yankees and Red Sox, who had budgets that were many times larger than their own. Just as major league baseball executives and scouts changed the way they thought about the game, wholesalers and sales management have changed the way they think about asset management distribution. Those who plan for the future will put themselves in a position to compete and win within increasingly complex and competitive markets.

At SalesPage, we focus on helping our clients gain a competitive advantage by leveraging data to enhance distribution efforts. The SalesPage family of products allows our clients to more effectively aggregate and take advantage of all first and third-party data and systems to create a more intelligent distribution strategy. Over the next 5 years, we will continue to help our clients more effectively utilize data, transform it into actionable intelligence, and leverage additional technologies to deliver client-specific outcomes and value.