Fearless Forecast | What’s ahead for the fund industry in 2014?

Two well-known industry experts offered their “fearless forecast” in a recent webinar.  Lee Kowarski, partner at kasina, and Avi Nachmany, director of research at Strategic Insight, discussed the industry trends most likely to endure in 2014.

HiResDuring the webinar, participants also weighed in, voting on the most important trends affecting technology and operations. Here’s what they selected:

  • New products (i.e. alternatives)
  • Regulatory discussions
  • Business intelligence

New products (alternatives)

Investors remain ambivalent about the direction of the stock market. As a result, products with a reduced correlation to equities are of increasing interest to investors.  For fund firms, this trend requires more focus on education both internally and externally. The added complexity of these products will have growing implications for operations.

Regulatory discussions

Regulators are asking many questions, including whether mutual funds are a source of systemic risk. Strategic Insight shared its survey information on mutual fund purchases and redemptions with the SEC. Based on 70 years of data, mutual funds shouldn’t be included in the discussion on systemic risk. However, wide-ranging and more public discussions about revenue sharing and 12b-1 fees will continue into 2014.

Business intelligence

Who’s buying your fund and which advisors are selling it? As an industry, the mutual fund industry is early to this game. kasina predicts that firms will look to staff up to invest in “true” business intelligence, moving towards using data to understand which messages to deliver and which financial advisors to target.

Is your firm prepared for what’s ahead? Which key business issues are you focused on? Please share your thoughts with NICSA.

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