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Jack of all Trades – Resourcing the Investment Management Product Function

Tuesday, 13 December 2016

The role of product management within an investment management organisation is one of the most misunderstood.  If ‘Product’ isn’t responsible for investment performance, sales or operations, how critical is it and how does an organisation best resource this function?

It is because of this confusion about the role of product management that many investment management organisations are either not allocating resources to product development or cutting back on their existing Product function.

What is causing this confusion, and is a Product function really required?

We find that ‘product’ is misunderstood because effective product management touches all aspects on an investment management operation, creating the perception that it is not a core requirement in itself. 

On the contrary, we believe that it is this breadth of scope that makes an effective product function critical.  Product provides a flexible, value-adding skill-set covering domain areas as diverse as distribution, strategy, finance and operations, while also providing the capability to bring it all together with strong project management and delivery discipline.

We have identified four primary causes for underinvestment in Product by investment management organisations:

Product 1 

Product 2Strategist, Technician, Project Manager, Dogsbody… - Are Product professionals strategists, project managers, technical experts in regulatory and operational issues, or investment specialists?  A. – All the above.  We argue that a product function needs to be able to tick all of these boxes.  As it is very difficult to find this broad range of expertise in one individual, members of a Product team must be able to complement each other (hard to do when under-resourced). 

Product 3

Just build it - ‘Product’ just means new product development, right?  Through this lens Product resourcing is viewed as ‘spikey’, consisting of project related work not requiring a permanent resource.  Yes, a large part of Product is product development, however, Product has an important role managing and providing input across the entire product lifecycle including product maintenance, pricing, rationalisation governance etc. 

Product 4

Stuck in the middle - The Product function is at the intersection of an investment management organisation, interacting with investment teams, distribution, marketing, client service, fund accounting, compliance, finance etc.  This can lead to the belief that these areas can back-fill part of the Product function in addition to their BAU role, reducing the need for dedicated Product resources.  We find in reality this approach places strain on important Product work as well as the ‘day jobs’ of other areas.

Product 5

Investment management is king - The Portfolio Manager is the face of the product, which reflects the role of the Portfolio Manager in achieving investment returns and promoting the strategy to the market.  However, who has detailed knowledge of product structure, operations, fees, disclosure etc.? This is where a Product resource who acts as the point-person for non-investment aspects of a product becomes critical to the organisation. 

The other underlying consideration when allocating increasingly scarce headcount within an organisation is that a Product resource is not directly revenue generating.  ‘Why hire an additional product resource when I can hire an additional BDM on the promise of an $X increase in AuM’? The logic behind this argument is appealing if you believe the rest of the organisation seems to have the expertise and capacity to fulfil the broad scope of the Product function, but do they?

What is at stake?

A lot.  As a ‘product’ is the means by which an organisation offers an investment strategy to clients, investment management companies are exposed to a very high risk if product related tasks are not performed well, or if things slip through the cracks.  A classic example in the financial services industry is the cost (financial and reputational) to an organisation of fee calculation and disclosure issues arising from errors and incorrect specifications while a product is being built. 

The other cost of an under-resourced Product function is the opportunity cost of being slow to market in developing an agreed new product initiative, or worse, missing an entire opportunity through lack of market insight. 

What is an investment management organisation to do?

Investment organisations must recognise the strategic importance of product development.  A Product function provides dedicated resources and ownership to mitigate the above risks and provide strategic input into the direction of the firm.  Having the discipline, expertise and delivery power of a robust Product team is essential for an investment management organisation setting and executing a product strategy in support of its overall business strategy.

Investment management firms must also implement a ‘right-sized’ product resourcing model for their size and strategic ambitions.  For those organisations not large enough to have their own well-resourced product team, we believe that accessing product expertise on a variable basis is a cost-effective alternative. 

Investment organisations taking advantage of a variable resourcing model are able to supplement their existing Product team (where one exists) with the right-skilled resources for the time when they are actually needed.  For example bringing in product delivery project expertise for the development and launch of a product, or fact-based market insights to contribute to product strategy setting. 

In our experience, organisations employing this model are able to access more experienced, expert resources for the period and task required for a lower annual cost than hiring a permanent junior or mid-level product resource.  Accessing expertise in this way also has the additional benefit of upskilling permanent team members on leading product development and governance practices, as well as the latest market trends occurring within the industry.

How Bridge can help?

Earlier this year, Bridge launched its Product Advisory Services practice, which provides a full range of product and business strategy consulting services.

Bridge’s Product Advisory Service is able to assist in designing the optimal Product operating model for investment organisations, including defining governance structures and roles.

Bridge is also well equipped to assist investment management clients with their product resourcing needs with highly skilled, fit-for-purpose product resources on a project, variable or retainer basis.

If you are interested in exploring how Bridge can develop a tailored Product Variable Resourcing solution to complement your existing product capabilities please contact Dale Rowley on This email address is being protected from spambots. You need JavaScript enabled to view it.