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It’s no secret that 2017 closed with a period of remarkable and sustained market expansion. Capping a year that featured strong economic growth, an improving job outlook and bolstered consumer confidence, the Dow Jones Industrial Average index hit record high after record high in the fourth quarter.
Despite this historic bull market that boosted performance for many investment strategies, institutional investors’ overall satisfaction with their existing asset managers has declined sharply from the previous year. Specifically, institutional investors surveyed in the eighth annual US Institutional Investor Brandscape® study report an average top 3-box satisfaction score of just 60%, versus 67% in 2016.
Although satisfaction scores of “softer” attributes such as integrity and transparency, service and support, and investment team makeup show positive improvements in 2017, fewer than half of institutional investors are satisfied with more tangible attributes such as asset manager fees and fee structure, alignment, and product innovation.
Yet, in spite of these negative trends, there are some intriguing alternatives for asset managers looking to meet the changing needs of institutional investors. By moving beyond the traditional focus on investment performance and exploring untapped opportunities within the smaller end of the market, asset managers can take positive steps toward solving the satisfaction puzzle.
Download our white paper, Solving the Institutional Satisfaction Puzzle, for more on uncovering untapped opportunities in the challenging US institutional market.