Focus on: New challenges for multi-asset portfolios

Wei Li, BlackRock’s Global Chief Investment Strategist, and Vivek Paul, Head of Portfolio Research, join Oscar Pulido to look ahead to the key themes for 2023. The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. This information is intended to be for information purposes only and it is not intended as promotional material in any respect. Investors will need to ask their managers tougher questions about how they are meeting the challenges of structural change.

Additionally, it has the potential to generate increased revenue as clients have demonstrated they will pay for value. Unprecedented stock market gains have both created opportunities for wealth managers to demonstrate their value while also shining a light on the obstacles wealth managers need to overcome. Increasing demand for hybrid advice, goal-based planning and pay-for-performance fee structures have emerged because of this unique situation. SS&C Eze is helping 1,900 global asset managers transform their investment process to optimize operational and investment alpha and grow their business. The past few years have brought about many changes in investment management practices and best practices.

And with margins at an all-time low, there is less budget available for external market data costs. Multi-asset strategies offer enormous flexibility to meet specific investment goals, with broad options for investing across securities and sectors. These types of strategies also offer more diversification compared to investing solely in fixed income or equity funds. Going forward, investors will need to ask their managers tougher questions about how much analysis they are doing within and across asset classes, as opposed to just between asset classes.

  • Wealth managers have been known for providing exceptional client service, tailored investment recommendation and advice.
  • For that matter, how many of the successful multi-asset funds of recent years are actually bond strategies in disguise?
  • Harnessing digital through data analytics to learn more about clients is one step to tackling this.
  • But here too, your in-house or outsourced team of graphic designers will need time to generate charts and visually represent signals for the easy understanding of traders.
  • Research, documentation and confirmations can be shared digitally and advisers can service multiple cilents through a shared portal.
  • You could also desire to provide market news, analysis and opinions, trading education and calendar notifications in multiple languages.

But in the 2020s, we expect investment market returns will be lower and risk harder to manage. Looking forward, a disciplined multi-asset approach will be especially valuable to identify opportunities and help mitigate setbacks. It’s undeniable that the past year and a half has forced businesses to adapt to technology—both spurring existing tech on, and being the catalyst for new tech to emerge and solve problems. Wealth managers who have considered transforming their digital journey to delight their customer are the ones who are future-proofing their business. Once that is achieved, the focus is then on providing value beyond investment performance in terms of service experience and comprehensive client wellness.

Managing downside risk has never been more important than in the current environment. With existing solutions often focussing largely on traditional asset classes, the pre-trade decision support tools available are often limited to basic modeling/what-if analysis of a single asset class. Most asset managers spend years automating and refining automation of business-critical workflows to improve speed-to-market for new investment decisions. We offer individuals and institutions access to our strong investment capabilities across all major asset classes and solutions aligned to growth trends.

Time-consuming ComplianceIf you provide support, analysis and education in multiple languages and across jurisdictions, additionally you must make sure regional compliance for the content. Frustrating ComplianceIf you provide support, analysis and education in multiple languages and across jurisdictions, you additionally need to ensure regional compliance for the content. As a global investment manager and fiduciary to our clients, our purpose at BlackRock is to help everyone experience financial well-being. Since 1999, we’ve been a leading provider of financial technology, and our clients turn to us for the solutions they need when planning for their most important goals. A multi-asset investment strategy combines different types of asset classes to create a nimble and broadly diversified portfolio.

Challenges faced by multi-asset brokers

In this race across the financial ecosystem, the goal is clear – differentiate and redefine how value is added throughout the trading lifecycle. The rise of advanced technology in financial markets doesn’t signal the end for human brokers and traders. Rather, it heralds an exciting next chapter in the evolution of global markets where new ideas and innovations will crown the leaders of the future. As we navigate this dynamic landscape, we must embrace the challenges ahead as opportunities for growth, innovation, and success in the ever-evolving world of trading. The cost of market data is no doubt one of the largest third-party costs for asset managers.

Challenges faced by multi-asset brokers

CNBC Pro asks the experts how to invest to ride out the volatility — and make money in the process. Additionally, the presentation highlighted Tradu’s
approach to multi-asset trading and the importance of regulatory compliance and
technological sophistication in the crypto space. Weak US jobs data triggered USD sell-off as investors bet on slower Fed rate hikes. A target-date mutual fund is designed to grow and protect the earnings based on the year in which you expect to begin making withdrawals. They often have names containing the target year, like the Fidelity Freedom 2055 Fund. The rise of passive funds and robo-adviser apps are driving down fees that a wealth manager has historically been able to charge.

It is already difficult to do that for multiple trading instruments in a asset class. So, you’ll be able to quite imagine how are you affected when you will find multiple asset classes. Providing Charts and SignalsThis can be something that may help you stand out if you’re able to take action in a timely manner. But here too, your in-house or outsourced group of designers need time for it to generate charts and visually represent signals for that easy idea of traders. It can be already difficult to try this for multiple trading instruments inside an asset class.

We are entering a world where the value added by portfolio managers is not just about getting the “bonds vs. equities” decision right. The asset class-level decision will always be important, but success increasingly depends on allocation within and across asset class buckets. This evolution requires a keen understanding of how workflows are changing, offering not just market access but also the tools and insights needed for short-term success and long-term adaptability.

To react quickly to market movement and corresponding events, managers need configurable analytics views built directly within their modeling tools, so the analytics they need are always at their fingertips. By agreeing to the Terms of Use, you confirm and acknowledge that you are acting in your capacity as a professional investor/client or representing a professional investor and not acting in a retail capacity. You may want to consult a financial professional for advice on which multi-asset strategy might be best for you. If Fund A is allowed to hold a maximum of 40% in equities and Fund B has a maximum of 50%, which will protect clients better in a market selloff? Opportunities are still out there, but the demands on multi-asset managers are becoming greater, and we are entering a less forgiving era where it’s going to be a case of “adapt or die”. After the brutal sell-off in stocks, a multi-asset approach is back in the spotlight.

Challenges faced by multi-asset brokers

Even if you do, the cost of an in-house multilingual support team can be prohibitive. You might also wish to provide market news, analysis and opinions, trading education and calendar notifications in multiple languages. Here again the time, effort and resources required by a team of translators could make the entire exercise unviable. Multilingual SupportTo establish an international footprint, you will have to be capable of provide support for your clients within the language these are the preferred in. You may not have the ability to establish a local presence in most regions you want to offer services. You can also desire to provide market news, analysis and opinions, trading education and calendar notifications in multiple languages.

By clicking on “I accept”, I confirm that I am not a citizen of the United States, that neither my place of residence nor place of business is in the United States and especially I am not a person that is a “U.S. Government bonds have been a powerful part of multi-asset managers’ toolkit for many decades, acting as a reliable diversifier and safe haven. A member of the audience asked for more details about
Tradu’s crypto offerings, prompting Callan to elaborate on the platform’s plans
for crypto CFDs and spot exchange.

Challenges faced by multi-asset brokers

You can also offer valuation reports and dynamic trading signals by directly linking market updates and news to actionable trade setups. A good way to do so is to provide powerful trading tools, market insights, research and analysis. But now there is a much wider breadth of data to leverage, ranging from a customer’s digital footprint to alternative data sources coming from structured and unstructured data. This allows banks to use AI and Machine Learning to provide value-added advice and recommendations. Technology also helps improve what wealth managers have always been known for – client servicing.

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