This is a part of a series of articles on CRM for Financial Services. Recently I wrote about CRM for Investment Banking, this time I am going to focus on CRM for the Asset Management industry.

CRM in Asset Management – An Overview

Like many Financial services organisations Asset Managers might describe their CRM objectives are relatively straightforward. Some may even describe the usage of their current CRM system as a contact management, perhaps even a Rolodex. An organisation that is definitely not in this category and is a a great example of a successful CRM implementation  is Henderson Global Investors. For a great example of how CRM can be used I highly recommended reading their case study.

With Microsoft Dynamics CRM Henderson can count automated marketing, mobile access, better quality data, better reporting and comprehensive view of their investors as just some of the benefits they have realised with Dynamics CRM.

For the purpose of clarity I think it is worthwhile if I explain what I mean by an Asset Manager, I am talking about large Investment firms (like Henderson, Jupiter, etc) as well as smaller fund managers such as Hedge Funds, Fund of Funds, Wealth Managers and so on. If you are new to this industry think of an Asset Manager as an organisation that creates products (funds) and that investors invest money into and expect a return on that investment. Investors may be other asset management firms, institutional investors, high net worth investors or private or retail investors. Some funds are pooled meaning that investors pool their money into a single vehicle and a fund manager uses the pooled funds to make a return (a bit like a pension fund). Other funds may be “managed” meaning that a fund is managed by a Fund manager for a single investor according to specific terms  and investment guidelines.

Different funds will have a variety of characteristics such as the investment strategy and will have different fees that the investor pays such as performance and management fees.

The above is very much a simplified view of an Asset Management firm but it should suffice for this article.

Although their CRM objectives might be simple, in my experience I would describe some of the issues encountered by asset management firms as some of the most complex I have come across in the financial services industry. One of reasons for this complexity is the difficulty identifying an Investor (client). You would think this would be simple, an investor invests in a fund for X amount and the value of a clients investment is  X + a % return (hopefully positive). Unfortunately this is not always the case, many investments (for a variety of reasons which I won’t go into right now) are made via custodians, nominees and may be pooled and so whilst I might make a $1M investment in the “Absolute Return Fund” the asset management firm might not see that transaction under my name but rather something that might look like this: $1M, Subscription, Absolute Return Fund, Account Name: XYZ Custodian REF 5555.  It is in the mapping of these transactions to the underlying investors (UBO: Underlying Beneficial Owner) that some of the complexity lies. So understanding who their Investors really can be quite a challenge for these firms.

Also, like many industries try to avoid using the term CRM! Call it anything but not CRM, I use Investor Relationship Management.

I would summarise the overall trends regarding Investor Management in the Asset Management industry as follows:


Low Growth

It is not just about more Investors, it’s about more sustainable relationships and longer term investments. The days of huge returns where a few years go, for many years now there has been a lot of uncertainty and so funds managers have to work harder to grow and retain investors than ever before. It used to all be about the % return. Now it is much more complex than that.

Investor Expectation

Investors have ever increasing expectations and both Institutional investors and private investors have high standards with regards to their client servicing requirements, they want personalised and tailored client reporting. Investor servicing is increasingly one of the most important and complex functions of a fund manager.

Regulation and Compliance

Compliance and regulation has probably been the most talked about topic over the last few years in this industry (.e.g Dodd-Frank, FATCA, ERISA) . Not only has there been a lot of changes but these changes are continuing at pace. Auditability of interactions, flexibility to change with new regulations and having control of data are key to all firms. Many organisations have had to rethink their approach to managing business, operational and compliance risk and with the needs to become more transparent, fund managers want to make sure that they remain compliant without impacting performance.

Many complex back office applications that are not integrated

Traditionally, firms would buy best of breed apps or build their own, these systems often have poor or no integration and considering the trends of increasing complexity of products, market velocity and investor expectation this causes a lot of inefficiency in the organisation. Years ago if I had suggested that an organisation change their behaviours to fit the solution or technology I would have been shown the door, it was always about changing the technology to meet the needs of the users with little consideration on if the users behaviours was the most efficient way of doing something (it was just they way it was always done). Today the story is very different, organisations understand and expect best practise from systems and are willing to change their processes to meet the software. They are asking for systems and process that they can configure and not systems that require complex customisation.

Consumerisation and ubiquity of access

We are all walking around with tablets nowadays and fund managers are no different, they want and need access to their data on these devices in a secure and useful way. Whether this is a single view of investor data for client meetings or detailed risk reporting metrics they want information wherever they are.

Simplification of process and systems

With all these changes such as regulation, client servicing demands, organisations need to reduce the complexity in the business by adopting best practice but with the flexibility they need to support their own models.

This is then underpinned by some of the key technology trends such as: Big data

  • Analytics
  • Mobile
  • Cloud
  • Platform

What follows are some examples of what Asset Managers are looking to do with CRM:


Visibility of Investor Holdings

The ability to view an Investor’s underlying investment and entire holding. As outlined earlier these can be complex due to investment made via custodians, nominees etc. Firms can use CRM to help map these transaction to the Underlying Beneficial Owner (UBO) ensuring that the firm has a complete view of an investor. The relationship management aspects of the system should allow fund managers to identity potential investments against investors and funds. Reporting these potential investments or indeed redemptions means that a fund manager has a good understanding of the likely (future) size of the fund based upon expected inflows and outflows.

Automation, Alerts and Exception Handling

With the wealth of information available and the need to move faster, rising investor expectations and with frankly less resources than before Asset Managers are looking to automate as much as possible. Rather then manage each process it is about surfacing issues when they occur and manage by exception.

Client Reporting & Document Management

With increasing sophisticated requirements from investors, fund managers are required to deliver personalised and tailored investment reports. As Asset managers increase their institutional investor base (e.g. pension funds) then the complexity of the reporting increases. The need to store documents across the investor and investment lifecycle, including client reports, attribution and risk reports and so on, firms want to centralise the document storage, control versioning, manage both the structured data (e.g. performance) as well as unstructured (e.g. fund manager commentary) and they need to see all this information against an investor record.

Single Investor View, Insight & Dashboards

The ability to see a single Investor and underlying holdings. Dynamics can provide the integration layer across back office systems (integration or view). This is what I often call the “single point of entry”, which is to say that Microsoft Dynamics CRM  becomes the “authoritative source of data” the place where people go to see client data with confidence. Microsoft Dynamics CRM does not need to be the golden source but it does surface this information in a single user interface. We have seen great success in user adoption because we are removing multiple applications and replacing it with Outlook (or the web client for those who do not have Outlook).

Complex relationship mapping

The ability to store and view the complex relationships from the Asset Managers perspective as well as from the Investor and any third party relationships that might be involved in the deal or relationship. With many parties involved, firms need to map Investors, Custodians, Nominees, Consultants and Advisors in order to fully understand the complexity and stakeholders in a relationship.

Compliance & Due Diligence / Swiss Data / FACTA / ERISA

Regulations are constantly changing and these regulations put massive restrictions on the business. They need the ability to satisfy these compliance rules (client data & KYC) and need to make sure that their data remains safe behind their firewall and in region. Whilst Microsoft CRM can be deployed on premise, cloud and hybrid cloud it is the ability to deploy to their own data centers in region that give firms complete control of their client data. Should regulations change then they still have the flexibility to move to the cloud on a case by case basis.

Campaign and Communication Management

The investor servicing team needs to regularly distribute information to Investors. Information such as performance reports, Fund Manager newsletters or new fund launches all need to be distributed in a personalised and timely fashion across different channels.

Mandates and Investment Guidelines

Firms need to be able to capture mandates and investment guidelines from the Investor. Capturing this information is key not only from a regulatory perspective but also for increasing a client investment in the fund(s).

Investor & Fund On-boarding

The Investor on-boarding process is often managed by legacy applications and processes or bespoke software that is costly to maintain and difficult to change. KYC, Anti Money Laundering (AML) , compliance and operational process are often held in a black box with no visibility to the extended Investor servicing team or relationship managers. Reducing time to value is a key metric yet difficult to improve because of the lack of visibility. A good CRM system exposes this information so that it can be automated, alerts created and actioned.

Investor Expectation

Client expectations are increasing, the drive to more profitable relationships mean that firms need the ability to manage client efficiently and effectively. Making sure that the most profitable relationships are receiving the best client service possible is increasingly important. Segmenting their coverage of client means that account teams and relationships managers are always in control.

Investor Road shows

Managing road shows and events, making sure that  fund managers are meeting the right investors has traditionally be done on an ad-hoc, manual and in efficient way. Automating the process, having this data in CRM and maintaining a single view with complete Investor interaction in CRM gives firms the ability to simplify the process and reduce the cost of service.

Investor Servicing

Ability to define entitlement rules with teams managing investors and deals with a significant degree of granularity. Ability to manage activities (call reports) and report on total investor interaction. Collaboration is a key factor, organisations needs to be able to collaborate due to the complexity of coverage (funds and region). Collaboration enables organisations to provide a better more informed services to their investors. Often these collaboration applications fall outside of the CRM system and process; this is not an effective way of working. A good CRM system should pull this information into the client workflow.

I hope that was useful. I will continue to add to this series so stay tuned!  If you are interested in my other financial services articles then you might want to also take a look at XRM in Financial Services,  Financial Services Webinar: Mobile and Tablet Experiences for Financial Services Institutions and a recent radio like show I did called A CRM Working Lunch.

This posting is provided “AS IS” with no warranties, and confers no rights.

Next time on Mark Margolis’s Blog: TBD