Asset managers are eager to establish themselves in new markets and are prioritizing broadening product distribution and creating new investment vehicles, according to the latest Cerulli Edge—U.S. Managed Accounts Edition.

Asset managers often feel they have reached their maximum distribution potential through the segments and channels in which they historically have operated. With a global market of hundreds of managers vying for every investment dollar, relatively few opportunities exist for employing a "blue ocean strategy," in which firms can address new markets with relatively limited competition.

According to the research, 71% of asset managers cite broadening product distribution to new segments and channels as their top priority in 2024. For instance, distribution through registered investment advisors (RIAs) was an afterthought to most managers for decades, even when advisors in the channel were already using their products. Now that several RIA aggregator firms are achieving scale, several managers are incorporating them into their key account distribution strategy in the same manner they would with legacy broker/dealers.

Alongside this, asset managers are also focused on creating new investment vehicles (54%) and increasing their ability to offer personalized investment strategies (50%). When asked about their product initiatives in 2024, 79% of asset managers cite active exchange-traded funds as their top priority. Likewise, asset managers express interest in both model-delivered (54%) and manager-traded (46%) separate accounts.

“These results highlight the future path of traditional asset managers. While they were built on the backs of mutual funds, their future success depends on transforming their organizations to support different structures and meet the demands of the market,” says Scott Smith, director. “Moving forward, Cerulli expects managers to be increasingly open to using their intellectual capital in nearly any way a wealth management platform can consume it. Finding emerging opportunities will be an increasingly important aspect of the key accounts staff,” he concludes.