Asset managers have faced no shortage of obstacles over the past 18 months. While some sectors of the market have been battered by the COVID-19 pandemic, others have soared, making the always challenging task of creating bulletproof investment products even more difficult. On top of that, asset managers also had to figure out how to maintain consistent service to advisors during a sudden shift to remote work.
To discover the asset managers that have risen to these challenges to provide top-notch performance, innovation and product options, Wealth Professional reached out to advisors across Canada, asking them what’s most important when choosing an asset manager and which companies are consistently meeting their expectations.
When it comes to the elements that survey respondents rallied around, service provided to the advisor and investor took the top spot. On that point, Roy Ratnavel, executive vice-president and head of distribution at CI Global Asset Management, notes that the ongoing pandemic has been “the greatest recent challenge for our industry and for our society. At CI GAM, we were able to make a seamless transition to the new working environment. We have continued to provide a strong level of support to advisors and clients, as well as successfully executing on our business strategy.”
A client-centric approach is also paramount at Mackenzie Investments, whose philosophy revolves around putting the investor at the centre of everything they do.
“We believe strongly in the value of financial advice,” says Kristi Ashcroft, senior vice-president and head of product at Mackenzie. “We aim to service the advisor community with market insights, high-performing products and value-add services such as tax and estate, practice management, and portfolio construction consulting.”
None of this would be possible, of course, without a strong risk management framework. Sadiq Adatia, chief investment officer at BMO Global Asset Management, points to this framework as one of the main components of BMO GAM’s success. “It will continue to be key,” he says. “Our teams collaborate on a daily basis – including sales, operations, trading and other areas – to ensure we are delivering an exceptional experience for our clients.”
During times of market turbulence, communication is also critical – and it’s something Dynamic Funds has emphasized over the past 18 months.
“We have increased our communications and embraced new tools to help build confidence and peace of mind for advisors and for clients,” the company says. “We have also adapted to meet clients’ evolving portfolio needs, from diversification and risk tolerance to asset allocation and more.”
In such an uncertain environment, advisors have been under a huge amount of pressure as clients reassess their financial plans. That’s made supporting advisors an even bigger priority for many asset managers, including Manulife Investment Management.
“We know the pressure our advisors are under,” says Catherine Milum, head of wealth sales for Canada at Manulife. “Not only are they providing valuable advice to help investors with their financial planning goals, but we also know they’re providing emotional support in new ways. Our team has been with them by leveraging behavioural economics to help advisors understand how emotions are shaping investor decisions. We have also continued our direct access to our portfolio managers, capital markets, and tax and estate planning.”
The power of product
Service is undoubtedly important, but it’s of little use to advisors unless it underlies a robust range of products able to meet their clients’ investing needs. Ninety-one per cent of advisors said product performance is an essential quality they look for in an asset manager, and 81% said they seek a broad range of products.
At Mackenzie, Ashcroft says, “our product range is continually evolving, ensuring that Canadian investors have access not only to traditional products that deliver attractive investment returns, but also to newer asset classes and investment strategies such as private credit, infrastructure, thematic environmental strategies and sustainable investing.”
When designing new products, Ashcroft notes that it’s crucial to “balance innovation with tried-and-true investing disciplines. We want to be innovative in the way we think about products that will bring diversifying and return-enhancing investment exposures to client portfolios, such as Chinese equity and fixed income or private equity replication. We also want to be innovative in offering products that aim to solve for some of the key investment challenges our clients face, such as sequence-of-returns risk or inflation risk in retirement.”
Likewise, CI GAM isn’t resting on its laurels when it comes to delivering a comprehensive product lineup that meets investors’ needs.
“Our mandates are available in mutual funds, ETFs and private pools, allowing our clients to invest in the structure they prefer,” Ratnavel says. “Additionally, we have introduced products providing access to asset classes and investment approaches that were previously restricted to large institutional investors or otherwise difficult to reach. These include cryptocurrencies, liquid alternatives and other alternatives such as private markets.”
Manulife Investment Management, meanwhile, has drilled down the essence of a great product lineup into three core values.
“Firstly, there’s strength and performance,” Milum says. “Then there’s longevity – we have some flagship funds approaching their 25th anniversary. Finally, there’s breadth: the ability to offer mutual funds, ETFs, segregated funds and SMAs across a wide variety of asset classes and geographies.”
Manulife is also proud of the strength of its brand – a factor that wasn’t as critical to advisors as service, performance or innovation, but was still important. Sixty-seven per cent of advisors said they consider brand awareness when selecting an asset manager.
“Manulife has been deeply rooted in our Canadian heritage since 1887 – so much so that one in four Canadians have a Manulife product,” Milum says.
Ashcroft adds that strong branding can help succinctly communicate an asset manager’s core values to advisors and their clients.
“In terms of branding, we always hope our brand reflects our purpose – to create a more invested world, together – and our commitment to offer the education, insights and products that enable good investment decisions and outcomes,” she says.
What’s coming next?
While it’s impossible to predict the future of the markets, this year’s 5-Star Asset Managers are confident they’re well positioned to take advantage of whatever challenges and opportunities might come their way.
Milum takes it as a positive sign that investors “are more aware than ever of the importance of insurance and wealth management due to the global pandemic.”
And at BMO GAM, “we expect the market will continue to demand strong risk-adjusted returns with reasonable fees,” Adatia says. “We also expect the markets will continue to look for more socially aware products and/or ESG integration within the investment process. However, to fully understand the future of markets requires a strong understanding of clients in order to deliver the innovative tools and products required to meet their evolving needs – something I know we spend a lot of time thinking about.”
To find the best asset managers in the Canadian investment industry, Wealth Professional surveyed thousands of advisors across the country, asking them to name the asset managers they hold in the highest regard. Survey respondents rated their favourite asset managers across five categories:
• service provided to the advisor/investor
• range of products available
• brand awareness
WP also asked advisors to weigh in on which of these aspects is most important when working with an asset manager. At the end of the survey period, the Wealth Professional research team tallied the scores from all advisors, and the highest-scoring companies were named 5-Star Asset Managers for 2021.