Pandemic Perspectives – A New World Order

June 3, 2020

U.S. President Woodrow Wilson used the phrase “new world order” toward the end of the First World War to

describe his vision for international peace, based on the belief that the world could no longer operate as it

once had.

At Greenwich Associates, we believe that the COVID-19 crisis is a seminal event for the asset management

industry from which a new world order will arise. For years leading up to the COVID crisis, the industry has

pursued incremental enhancements to challenges related to operational eﬃciencies, alignment of interests

and use of technology, marketing and client experience approaches.

The COVID crisis will lead to new thinking and approaches to address these challenges, driven by new

business models, new pricing structures, greater outsourcing, and investments in technology and data.

But, let’s not get ahead of ourselves. The global war against the coronavirus and its impact on economic

stability and market volatility continues to rage and will for some time. Until a vaccine is developed and

widely distributed, the industry, like the world at large, will remain in a period of transition.

During this transition, the actions that asset managers take to prepare for the post-COVID environment will

have lasting impact on their success once the war is ﬁnally won.

Phases of the War

Over the past two months during the height of the COVID outbreak we conducted weekly “pulse” studies with

asset owners, investment consultants and asset managers to provide real-time insights about rapidly evolving

industry needs and best practices. Managers are responding to investors’ shifting needs, with the leading

ﬁrms positioning themselves for long-term success.

Phase 1: The First Battle of the Marne

In the initial phase of their coronavirus response (mid-to-late March), asset managers were largely on the

defense. A torrent of client and consultant inquiries about portfolio performance and market events arrived

just as managers themselves were transitioning to a work-from-home environment.

Like the French and British soldiers in WWI counterattacking along the Marne River, early responses from

managers during the COVID outbreak focused on daily newsletters, market intelligence and portfolio reports

delivered during sometimes grueling 18-hour days. Although managers reported that they were relatively well

prepared for the unexpected circumstances, the primary goal appeared to be responsiveness.

Phase 2: The Rolling Barrage

Soldiers in WWI used an oﬀensive tactic, the “rolling barrage,” in which they would ﬁre a hail of artillery as a

curtain for infantry following closely behind, the purpose of which was to oﬀer cover to advancing troops.

Likewise, as markets stabilized in early April, managers shifted toward oﬀense in the second stage of their

response (early April to mid-May).

Calmer markets provided breathing room to establish a strategy aimed at proactive outreach to clients and

consultants. Leading ﬁrms that already had cultures of service excellence were able to distance themselves

from competitors through thought-provoking, opinion-oriented intellectual capital delivered through a variety

of tech-enabled formats.

Phase 3: The Stasis of Entrenchment

Much of the western front of WWI was fought in the trenches in Belgium and France. Despite courageous

ﬁghting on both sides for prolonged periods of time, trench warfare often resulted in gains measured in mere

feet (on a front that was hundreds of miles long).

In the ﬁght against COVID-19, we ﬁnd ourselves in a similar stasis today, though one incomparably safer. The

days working from home blend together. We must all ﬁnd personal and professional patterns during what is

likely to be an extended period of uncertainty.

This phase of the war, however, is an important period that will ultimately determine which asset managers

ascend to the top of the league table in the next business cycle. These “best-in-class" ﬁrms will 1) ensure that

the communication and service levels set during the early stages of the COVID response are institutionalized

as ongoing processes, 2)ﬁnd ways to reconnect their high-quality people with investors, and 3) utilize their

key diﬀerentiators on behalf of the segments they choose to serve.

Further, it’s an important transition phase because many of the industry trends that have emerged are likely

to accelerate. For example:

Industry concentration – Either through M&A or attrition (ﬁrms closing their doors)

Enhanced use of technology – To enhance investment processes and distribution eﬃciency

Demand for advice – As investors struggle with increasingly complex markets

Professional marketing – As managers realize that investor engagement can be a competitive

weapon for growth

Client centrism – In an eﬀort to optimize relationships with key accounts

With no clear timeline for a COVID-19 vaccine, we don’t know how long this phase will last. But, like the

soldiers in the trenches, we know that it will end, and that the world will look very diﬀerent on the other side.

Phase 4: The New World Order

Following the “war to end all wars,” Woodrow Wilson argued for an approach to world governance that would

identify, understand and address worldwide problems. President Wilson focused on shared challenges like

collective security, democracy and self-determination. Although his vision did not fully come to fruition, the

new world order following the war made good progress on these issues.

Likewise, in the wake of the COVID-19 pandemic, the asset management industry is likely to make signiﬁcant

progress on the long-standing challenges that have vexed our industry.

Challenges like how to best align the interests of investors and managers; how to optimize client experiences;

how to eﬀectively deploy capital to beneﬁt society; how to leverage technology to optimize investor

experiences; how to ensure proper investment oversight and expertise; and how to structure retirement

savings plans.

While the answers to these challenges are not yet clear, a raft of established providers, not to mention

entrepreneurs, are hard at work on creating innovative solutions. Be on the lookout for new business models,

new fee models, opportunities for outsourcing, new approaches to using technology, and more eﬀective uses

of data.

History shows that dislocations spawn innovation in industries in need of disruption.

Greenwich Associates is privileged to serve the world’s leading asset managers and investment consultants

assess and reﬁne their business strategies through our data, analytics and insights. We hope that you have

found our "Pandemic Perspectives” blog series helpful during the early days of the COVID crisis.

We are excited about the opportunity to help our clients successfully navigate the uncertain environment in

the months ahead. Please do not hesitate to reach out to us to discuss your speciﬁc needs.

Pandemic Perspectives Series

Part 1 – Greenwich Investor Resilience Index

Part 2 – Lessons from the Past

Part 3 – Supporting Consultants During Coronavirus

Part 4 – Asset Manager Service Quality: Pre- and Post-COVID-19 Onset

Part 5 – Leading Through Crisis

Part 6 – Useful Content in Times of Crisis

Part 7 – Managers Adapting Through Crisis

Part 8 – Using Analytics to Transform Sales, Win New Assets

Part 9 – Navigating the Virtual Event Landscape

Part 10 – Acceleration of Trend toward ESG

www.greenwich.com | [email protected]

Coalition Greenwich, a division of CRISIL, an S&P Global Company, is a leading global provider of strategic

benchmarking, analytics and insights to the ﬁnancial services industry.

We specialize in providing unique, high-value and actionable information to help our clients improve their

business performance.

Our suite of analytics and insights encompass all key performance metrics and drivers: market share, revenue

performance, client relationship share and quality, operational excellence, return on equity, behavioral

drivers, and industry evolution.

About CRISIL

CRISIL is a leading, agile and innovative global analytics company driven by its mission of making markets

function better. It is majority owned by S&P Global Inc., a leading provider of transparent and independent

ratings, benchmarks, analytics, and data to the capital and commodity markets worldwide.

CRISIL is India’s foremost provider of ratings, data, research, analytics, and solutions with a strong record of

growth, culture of innovation, and global footprint.

It has delivered independent opinions, actionable insights and eﬃcient solutions to over 100,000 customers

through businesses that operate from India, the U.S., the U.K., Argentina, Poland, China, Hong Kong, and

Singapore.

For more information, visit www.crisil.com

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