Despite challenging market conditions, coming up with actionable ideas to assist bankers and end-clients is something which can help firms differentiate the quality of their advisory capabilities and capacity.
Inevitably, investment professionals need to work harder against a backdrop of market uncertainty and volatilty to eke out information to facilitate relevant conversations with clients.
But this is particularly important in light of the objectives that clients have to keep their portfolios fresh.
And in doing so, it helps the front-line to demonstrate that they – and their institution – are in touch with the market, in turn enhancing client engagement, according to product gatekeepers and fund selectors in the Middle East, from a mix of local and international retail and private banks, at a roundtable in Dubai.
Winning client mindshare in this way shouldn’t be under-estimated, say practitioners.
It has been notable for gatekeepers in 2016 that there is no magic solution; different products have worked at different times during the past 12 months.
While high yield instruments generated good returns at a certain point, at other times senior loans were the place to be. And some insurance-linked securities also found some favour.
More broadly, gatekeepers are keen for clients to become more diversified stay invested – which would have earned them higher returns in 2016 than trying to make big asset allocation calls.
More specifically in terms of advising clients ahead of 2017, there is expected to be a more active engagement of alternatives, including real estate, private equity and hedge funds.
For various reasons, gatekeepers say it is easier for bankers to demonstrate portfolio value in the alternatives space.
Banking on the right partners
For many fund selectors, what they say will be valuable for them going forward is on-the-ground support by asset management firms.
There is a requirement, say the gatekeepers to eyeball a portfolio manager for a fund on a quarterly basis, for example. And for some banks, this type of accessibility is becoming increasingly important.
Yet this is a difficult commitment for some foreign asset managers to make. A combination of the market environment, limited fund penetration and tough regulatory landscape inevitable lead to them having second thoughts about entering the GCC.
To cover the region properly they need sufficient bandwidth, yet the distribution opportunity in the UAE, for example, doesn’t scale up in many cases.
Further, some gatekeepers expect the majority of fund flows in 2017 will more likely go to some of the bigger fund houses, with more prominent brands and names which resonate with clients.