AIMSE 18 TH ANNUAL CONFERENCE - EDUCATIONAL SEMINAR Career Development SKILLS NEEDED FOR MARKETERS Kim Yates, Director Asset Management Practice, Principal Search 1st February 2006

AGENDA How did we arrive at where we are? A look at some major events that have changed the asset management industry Career management – how can you maximise your potential in an increasingly specialist market ….

How did we arrive at where we are? A look at some major events that have changed the asset management industry

Career management – how can you maximise your potential in an increasingly specialist market ….

HISTORY OF ASSET MANAGEMENT Late 19th century: Investment Trusts 1931: M & G Launch first UK Unit Trust 1970s: Development of Pension Fund Management 1980s: Dramatic Growth of Mutual Funds 1990s: Growth of AUM, economies of scale, acquisitions by banks and insurance companies 2001-03: The Perfect Storm Present & Future: Horses for Courses

Late 19th century: Investment Trusts

1931: M & G Launch first UK Unit Trust

1970s: Development of Pension Fund Management

1980s: Dramatic Growth of Mutual Funds

1990s: Growth of AUM, economies of scale, acquisitions by banks and insurance companies

2001-03: The Perfect Storm

Present & Future: Horses for Courses

Growth of UK Pension Assets 1963 - 2004 Source: ONS, UBS

Projections for total UK Pension Assets Source: UBS Global Asset Management estimates based on data from National Statistics, Inland Revenue, Association of British Insurers

Internationalisation of US Pension Plans Source: InterSec Research

WHERE DID IT ALL BEGIN? Companies asked their bankers to help manage pension assets in the early days hence the dominance of the merchant banks – Warburg (subsequently Mercury/MLIM), Schroders, Morgan Grenfell, Flemings, Hill Samuel Independent managers (Henderson, Geoffrey Morley, GT) challenged the merchant banks and the business development function emerged in the early 80s

Companies asked their bankers to help manage pension assets in the early days hence the dominance of the merchant banks – Warburg (subsequently Mercury/MLIM), Schroders, Morgan Grenfell, Flemings, Hill Samuel

Independent managers (Henderson, Geoffrey Morley, GT) challenged the merchant banks and the business development function emerged in the early 80s

THE BUSINESS DEVELOPMENT FUNCTION GROWS UP The development of business development skill and practice were largely learned from the US Management of Consultant Relations Development of dedicated RFP teams Direct Sales Activity Training for Beauty Parades

The development of business development skill and practice were largely learned from the US

Management of Consultant Relations

Development of dedicated RFP teams

Direct Sales Activity

Training for Beauty Parades

THE BUSINESS DEVELOPMENT FUNCTION GROWS UP Sales initially called “marketing” By 1990 Sales and marketing differentiated Dedicated consultant relations function Late 90s Balanced to Specialist trend well advanced Product Champions introduced to support sales of multiple specialist products

Sales initially called “marketing”

By 1990

Sales and marketing differentiated

Dedicated consultant relations function

Late 90s

Balanced to Specialist trend well advanced

Product Champions introduced to support sales of multiple specialist products

CLIENT RELATIONSHIP MANAGEMENT IS INTRODUCED AS A SEPARATE FUNCTION Previously undertaken by a combination of investment managers and back office administrators Large firms such as MLIM and Schroders split the investment teams around 2000 CRMs now recognised as a critical function requiring specialist skills and knowledge Revenue generation is now an important part of the CRM function

Previously undertaken by a combination of investment managers and back office administrators

Large firms such as MLIM and Schroders split the investment teams around 2000

CRMs now recognised as a critical function requiring specialist skills and knowledge

Revenue generation is now an important part of the CRM function

INSTITUTIONAL BUSINESS STRUCTURES - Model 1

INSTITUTIONAL BUSINESS STRUCTURES - Model 2

CLEAR DISTINCTION OF MANUFACTURING AND DISTRIBUTION – An Opportunity for You Success = Superior Investment Performance + Strong Client Relationships Power base of distribution has increased enormously since it took “ownership of clients” Business management skills largely held in distribution – the role of CEO is now in sight

Success = Superior Investment Performance + Strong Client Relationships

Power base of distribution has increased enormously since it took “ownership of clients”

Business management skills largely held in distribution – the role of CEO is now in sight

RAPPROCHEMENT OF RETAIL AND INSTITUTIONAL Historically retail was regarded as the poor relation But margins are good and it is growing fast Patterns of distribution are changing “pushing product via IFAs is no longer the name of the game” Key distributors need sophisticated levels of technical service as well as highly commercially tuned business management skills Skills needed for wholesale distribution are closer to those in the institutional market Remuneration for retail sales directors has now pushed ahead of their institutional counterparts

Historically retail was regarded as the poor relation

But margins are good and it is growing fast

Patterns of distribution are changing “pushing product via IFAs is no longer the name of the game”

Key distributors need sophisticated levels of technical service as well as highly commercially tuned business management skills

Skills needed for wholesale distribution are closer to those in the institutional market

Remuneration for retail sales directors has now pushed ahead of their institutional counterparts

“ They are never prepared enough about our fund and most of the time waltz in and say “tell us about your fund.” I expect more, there are dozens of publications to tell them about our fund” “ It is extremely variable, too often sales people don’t have the level of detailed knowledge which we need” “ 25% are the good ones – they distinguish themselves by understanding our needs and have more technical knowledge” “ Quality is variable and you know within 5 minutes whether they are knowledgeable” “ Some are more subtle than others, subtlety being a virtue!” – “ Variable quality, either very good or very bad” SKILLS NEEDED FOR SALESMEN AND WOMEN

“ They are never prepared enough about our fund and most of the time waltz in and say “tell us about your fund.” I expect more, there are dozens of publications to tell them about our fund”

“ It is extremely variable, too often sales people don’t have the level of detailed knowledge which we need”

“ 25% are the good ones – they distinguish themselves by understanding our needs and have more technical knowledge”

“ Quality is variable and you know within 5 minutes whether they are knowledgeable”

“ Some are more subtle than others, subtlety being a virtue!”

– “ Variable quality, either very good or very bad”

PENSION FUND SURVEY - CLIENT SERVICING Good quality client servicing is a basic requirement “ I take it as read that we should have accurate and timely reporting” “ We would soon let them know if there were things that we were not getting from them” “ My manager was strong in client service but they did not invest enough and fell behind” Competitive advantage comes from adding value over and above the service level agreement “ We should be leveraging on the experience of our managers on a whole range of issues where they have something significant to say” “ A CRM is great as a focus but not as a block…post Myners we need to know much more” “ We noticed much greater efficiency in having one central contact…we were always bothering the fund manager before”

Good quality client servicing is a basic requirement

“ I take it as read that we should have accurate and timely reporting”

“ We would soon let them know if there were things that we were not

getting from them”

“ My manager was strong in client service but they did not invest

enough and fell behind”

Competitive advantage comes from adding value over and above the service level agreement

“ We should be leveraging on the experience of our managers on a

whole range of issues where they have something significant to say”

“ A CRM is great as a focus but not as a block…post Myners we need

to know much more”

“ We noticed much greater efficiency in having one central

contact…we were always bothering the fund manager before”

SKILLS NEEDED FOR SALESMEN AND WOMEN What our clients say they want… Personal attributes Communication skills, including language ability Ability to listen Technical investment knowledge Enthusiasm, energy Flexibility, entrepreneurial spirit Stature, maturity, credibility Self-motivation, self-starters, team players Results driven, natural salesman

Personal attributes

Communication skills, including language ability

Ability to listen

Technical investment knowledge

Enthusiasm, energy

Flexibility, entrepreneurial spirit

Stature, maturity, credibility

Self-motivation, self-starters, team players

Results driven, natural salesman

SKILLS NEEDED FOR SALESMEN AND WOMEN What our clients say they want… Professional qualifications/experience Compliance – IMC, CFA Technical product knowledge at an increasingly sophisticated level Market knowledge – pensions practice and legal/regulatory framework, local influences Personal Contacts

Professional qualifications/experience

Compliance – IMC, CFA

Technical product knowledge at an increasingly sophisticated level

Market knowledge – pensions practice and legal/regulatory framework, local influences

Personal Contacts

SKILLS NEEDED FOR SALESMEN AND WOMEN - What my clients and your clients do not want… Product push Over-promise, under-deliver Delivery of something other than what they bought Meetings/calls for the sake of it – if you don’t have anything to say, don’t say it, think of something Off target sales Over-spending on the sales process Desperation!

Product push

Over-promise, under-deliver

Delivery of something other than what they bought

Meetings/calls for the sake of it – if you don’t have anything to say, don’t say it, think of something

Off target sales

Over-spending on the sales process

Desperation!

AND FINALLY CAREER TIPS….. Work hard Demonstrate, don’t claim Do what you are asked to do and do what you say you will do Don’t take it personally and don’t get intimidated What you don’t ask for, you don’t get Manage your clients’ and your boss’ expectations Don’t jump from job to job But move jobs occasionally to enhance job status and remuneration Network (and be nice to headhunters, you never know when you might need them) Enjoy your work, be proud of what you do

Work hard

Demonstrate, don’t claim

Do what you are asked to do and do what you say you will do

Don’t take it personally and don’t get intimidated

What you don’t ask for, you don’t get

Manage your clients’ and your boss’ expectations

Don’t jump from job to job

But move jobs occasionally to enhance job status and remuneration

Network

(and be nice to headhunters, you never know when you might need them)

Enjoy your work, be proud of what you do