Centralisation of product groups leads to better portfolio relationships, according to research from global analytics firm Cerulli Associates.
"One shift over the past several years is the centralisation of institutional and retail product development and management efforts. Centralisation has become so widespread that almost three-quarters of asset managers have centralised product teams," says Pamela DeBolt, associate director at Cerulli. "The way firms think about the retail space has shifted to a much more institutional process. The blurred lines between institutional and retail have sparked a change in how firms organise and they are now reaping the benefits of leveraging each other's expertise and resources."
In its Products and Strategies 2014: Devising a Product Plan in a Competitive Market report, Cerulli focuses on asset managers' retail and institutional product strategy and development across different asset classes (e.g. fixed income, alternatives), asset saturation among various vehicles (e.g. collective trust funds, exchange-traded funds, CEFs, and mutual funds), and product groups' organisational structures and governance processes.
"Another benefit of centralising these efforts is streamlining the conversations between product and portfolio managers," DeBolt says.
Many teams cover both institutional and retail, but also product development and management. Additionally, product development is moving away from a region-based effort to a global focus. Groups' responsibilities may differ from firm to firm, but there are some commonalities.
"Product development teams are responsible for product innovation, thinking about the bigger picture, and anticipating what may occur in the next several years. These teams focus on product implementation, handling buy-in from various parts of the organisation, and presenting to product and executive committees," DeBolt says. "Through research interviews with product executives, we see more firms elevating their product manager role to include responsibility for both product development and management across channels and markets."