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Money manager distribution professionals finding tougher environment with more competition — report

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Asset management distribution employees including salespeople, consultant relations officials and investment strategy specialists have been working "more intensely" since 2016 than in the past, but for "much less return on effort," finds a report by executive recruiting firm Heidrick & Struggles, released Thursday

Laurie Thompson, a principal with the firm's global financial services practice who authored the report, "2017 Talent And Compensation Trends in Asset Management Distribution," said distribution officials working for both traditional and alternative money management firms are reporting that 2016 and 2017 has been the most challenging period of their careers because of the increased competition in raising money from investors.

"At the traditional asset manager, they are very much struggling with the active vs. passive dynamic," she said in an interview. While hedge fund performance has improved recently, she said, hedge fund sales professionals also have been struggling for much of the past several years because of performance issues. And private equity and real estate managers reported that even though flows were going in their direction, they had to compete aggressively against other managers' funds, she said.

"Burnout and pressure on morale are real concerns for team leaders," the report found.

"Different factors" affected members of the distribution teams abilities to gain client assets, "with investment performance clearly being the strongest driver," the report said. The rise of passive investing affected not only traditional asset managers but also diversified managers that offer a range of investment strategies.

Ms. Thompson said a key pressure on employees working in distribution has been filling the ever growing needs of investors for information on investment strategies. "Investors are demanding and getting more transparency in terms of information; they are getting greater access to investment professionals; they are demanding and getting more frequent communications."

Other report observations include:

  • "while sentiment is mixed, the majority of sales professionals believe (their employers) have unrealistic expectations today;"
  • "while demand for sales talent remains high, more professionals are quietly considering their long-term career options; ... compensation varies widely, with little standardization;" and
  • "diversity will draw more attention as firm leaders increasingly consider its business impact and public policy initiatives."
A full copy of the report can be downloaded here.