Outsourced chief investment officers (OCIOs) are keen to optimize the client experience with initiatives aimed at improving transparency amid rising competition and ongoing fee pressure, according to the latest Cerulli Edge—U.S. Asset and Wealth Management Edition.
With the growing use of OCIO search consultants, pressure to provide the most granular level of fees in the name of full transparency is a growing trend. However, how to quote a potential client for the overall fees they will incur in the OCIO relationship remains an area of debate among OCIO providers.
There is no widely accepted standard for precisely how fees should be presented. For instance, some providers believe fees should be displayed at a very granular level, showing how each component of the relationship contributes to the overall fee charged. “Whatever manner in which a provider chooses to display fees, full transparency is most associated with client satisfaction, potentially leading to stickier assets and longer client relationships,†states Laura Levesque, associate director.
In addition to evaluating how much information to disclose to clients, providers are also evaluating how they communicate, looking at the mediums in which clients want to receive information. While service levels differ based on client, the research finds that “self-service» appeals to clients across the board, particularly amid the shift to remote work environments.
Top-of-mind for providers is implementing a client portal—57% of OCIO providers are considering adding a portal to their lineup. “Clients’ desire to obtain information on demand is largely driving this trend and should be taken into consideration when deciding what to include in a portal,†says Levesque.
Client portals can be simple report repositories or can offer clients highly sophisticated capabilities, ranging from prepared reports and documents to a full suite of on-demand services that can include access to proprietary analytics tools and risk management capabilities. Cerulli’s research finds a majority (57%) of providers include performance reporting on demand, access to recordkeepers (36%), and attribution tools (29%) as features.
Capabilities offered through portals vary by provider based on resources, specialization, and client demand. For instance, while proprietary risk and analytics tools are seen as a value-add for many providers, some may not have the resources to provide these capabilities. “Regardless of the individual services an OCIO provider offers through its client portal, the goal is to provide clients with a level of reporting that cements a seamless experience for the client, founded on transparency,†concludes Levesque.