Investment Management Market Research

Investment management does not only refer to buying and selling financial assets.

It also refers to the handling of these assets and other investments. The expression most often refers to an Investment Manager overseeing and trading the assets within an investment portfolio to meet a particular goal. They try to achieve these goals for the benefit of their clients whose money they have the duty of managing.

What is Investment Management Market Research?

Investment management market research delves into the mechanisms and trends of the investment world, providing valuable insights that aid in the formulation of investment strategies and decisions. It is about interpreting market signals, understanding investor sentiments, and predicting economic trends.

Furthermore, investment management market research identifies emerging markets and sectors with high growth potential, narrowing down the choices and allowing investment managers to focus on areas with the most promising returns.

Why Businesses Need Investment Management Market Research

Investment management market research equips businesses with the insights to understand global investment landscape changes and their implications. This understanding is crucial for businesses to stay agile and adaptive, ensuring their investment strategies are relevant and effective in the current market context.

Moreover, investment management market research helps businesses align their investment strategies with their broader corporate objectives. It provides deeper insights into market trends, competitor movements, and investment opportunities, allowing businesses to stay one step ahead. By understanding the market better than their competitors, businesses can capitalize on opportunities faster and more effectively, positioning themselves as leaders in their respective industries.

Benefits of Investment Management Market Research

However, investment management market research offers a multitude of benefits that can significantly influence their financial strategies and outcomes, including:

• Informed Decision-Making: It provides a solid foundation for informed decision-making. With access to comprehensive market analysis, investment trends, and forecasts, businesses and investors can make decisions based on empirical data and expert insights, reducing the risks associated with guesswork or intuition-based decisions.
• Strategic Asset Allocation: Investment management market research aids in effective asset allocation by providing insights into various asset classes and their performance under different market conditions. This information enables investors to diversify their portfolios in a way that aligns with their risk tolerance and investment goals, optimizing their chances of achieving desired returns.
• Market Trend Analysis: This research offers an in-depth analysis of current and emerging market trends, allowing businesses and investors to capitalize on new opportunities and stay ahead of market shifts.

How Is Investment Management Market Research Conducted?

The initial stage often involves defining the scope and objectives of the research to define the entire research process and understand market trends, investor behavior, and economic factors that influence investment decisions. Once the objectives are set, the research process moves to data collection.

Later, consultants gather information from various sources, including financial databases, market reports, economic forecasts, and investor surveys. 

After data collection, the next step is data analysis. This is where the bulk of the research work happens. Analysts use a range of tools and techniques such as statistical analysis, trend analysis, and financial modeling, to make sense of the collected data. The goal here is to identify patterns, correlations, and insights that can inform investment decisions.

The final stage of investment management market research involves synthesizing the analyzed data into actionable insights and recommendations. This synthesis is presented in a format that is easily understandable and applicable to businesses and investors.

How Does Investment Management Market Research Differ from Traditional Market Research?

Traditional market research primarily concentrates on consumer behavior, market trends, and competitive landscapes in various industries. Investment management market research, on the other hand, delves into financial markets, investment opportunities, economic trends, and investor behavior. Its focus is narrower yet deeper in the financial space, aimed at guiding investment decisions and strategies.

The methods used in investment management market research are more specialized and quantitative compared to traditional market research. Furthermore, the audience for investment management market research is primarily financial professionals, investors, and fund managers, whereas traditional market research targets a broader range of business professionals, including marketers, product managers, and executives. The utilization of investment research is more focused on guiding investment decisions, portfolio management, and risk mitigation.

What to Expect from Investment Management Market Research

When engaging in investment management market research, there are several key aspects and deliverables that businesses and investors can expect, including:

• Comprehensive Market Analysis: It provides an in-depth analysis of the investment market, including current trends, future projections, and sector-specific insights.

• Risk Assessment and Management Strategies: Investment management market research typically includes a thorough evaluation of risks associated with different investment strategies and asset classes.

• Investment Opportunities Identification: This research often highlights potential investment opportunities, backed by data and analysis. These opportunities are identified based on current market trends, economic indicators, and financial projections.

• Regulatory and Economic Impact Analysis: The research also covers the impact of regulatory changes and economic developments on investment strategies. This is crucial for understanding the external factors that could influence investment decisions.

• Performance Benchmarks and Metrics: Investment management market research usually provides benchmarks and performance metrics that help in evaluating the success of investment strategies.

Current Trends in the Investment Management Market

• Increased Focus on Sustainability and ESG Investing: One of the prominent trends is the growing emphasis on Environmental, Social, and Governance (ESG) factors in investment decisions. Investors are increasingly considering the sustainability and ethical impact of their investments, leading to a surge in ESG-focused funds and strategies.

• Technological Advancements and Digitalization: The investment management industry is witnessing rapid digitalization, with technologies like AI, machine learning, and blockchain transforming how investments are managed and decisions are made.

• Personalization and Customization in Investment Products: Customization and personalization are becoming key in investment management, with investors looking for tailored solutions that align with their specific goals and risk tolerance.

• Rise of Alternative Investments: There is a growing interest in alternative investments like private equity, real estate, and hedge funds. These alternatives are seen as a way to diversify investment portfolios and achieve higher returns in a low-interest-rate environment.

Technologies and Tools in Investment Management Market Research

The adoption of advanced technologies and tools in investment management market research has been transformative. These innovations enhance the accuracy and depth of research, streamlining the entire process. Here’s an overview of some key technologies and tools currently shaping investment management market research today:

• Artificial Intelligence and Machine Learning: These technologies enable the analysis of massive datasets, uncovering patterns and insights that would be impossible to detect manually. AI algorithms can predict market trends, identify investment opportunities — and even automate certain investment decisions.

• Blockchain Technology: Blockchain is increasingly being used in investment management for its security and transparency features. It offers a decentralized ledger system, which is particularly useful in verifying transactions and maintaining immutable records, thus reducing the risk of fraud and errors.

• Robo-Advisors: Robo-advisors analyze investor profiles and suggest investment strategies and portfolio management solutions, making investment advice more accessible and cost-effective.

• Financial Databases and Platforms: Bloomberg Terminal, Eikon, and other financial data platforms are indispensable in investment research. They provide real-time access to market data, news, financial statements, and analytical tools, all crucial for comprehensive market analysis.

Opportunities in Investment Management Market Research for Businesses

• Access to Global Investment Insights: Investment management market research provides access to global market insights. This global perspective is invaluable for businesses looking to expand internationally or diversify their investment portfolios across different regions.

• Identification of Emerging Markets and Sectors: Through comprehensive market research, businesses can identify and capitalize on emerging markets and sectors. This proactive investment approach can lead to higher returns and a first-mover advantage in untapped or growing markets.

• Customized Investment Strategies: Businesses can leverage market research to develop customized investment strategies that align with their specific goals and risk appetite. Personalized strategies are more likely to yield successful outcomes, as they take into account the unique aspects of each business.

• Adaptability to Market Changes: Investment management market research keeps businesses informed about market trends and economic shifts, enabling them to adapt their investment strategies accordingly. This adaptability is key to maintaining relevance and profitability in a dynamic financial environment.

• Enhanced Decision-Making Capabilities: With access to detailed market analysis and forecasts, businesses can enhance their decision-making capabilities. This leads to more strategic and data-driven investment choices, improving overall financial performance.

Common Terms in Investment Management Market Research

Assets

An Asset Manager is a financial services provider. Asset Managers are usually individuals or investment banks. Their job is to oversee all or part of a client’s portfolio. The asset manager’s job entails defining what investments to make or avoid. Their primary focus is to grow a client’s portfolio. They do rigorous research to analyze market trends to meet the goal of their job.

Private Banking

Private Banking involves institutions that deliver financial management services. Most of their clients are individuals with high net worth. These institutions offer investment-related help. They aim to tackle the full financial condition of every client. Consumer banks of every size now have Private Banking divisions. Private Banking clients don’t even have to wait in line or use a teller for services. They get concierge-like service and enviable rates. They also have direct access to the employees working their accounts.

Frictionless Market

A frictionless market is a hypothetical trading setting. There, all limitations and costs related to transactions are non-existent. Investment managers use frictionless markets to support their research and trading concepts. They must view both frictionless and friction analysis. It’s the only way to get a correct understanding of an asset’s return. The rise of new trading programs through FinTech is widening the range of activity, and helping to move toward almost frictionless markets.

Customer Centricity

Customer Centricity means developing and executing what customers value. Clients often switch wealth management providers in search of a better experience. It forces firms to shift gears. They now have to make the client’s needs a priority. Customer Centricity also means giving priority to having the right product or service. That product or service has to work the right way the first and every time for discerning customers.

FinTech and Robo-advisors

FinTech is the meeting of finance and technology, and it is transforming the landscape of investment management. Artificial Intelligence is one of the new developments. Other FinTech disruptors are Machine Learning and Big Data. FinTech uses them to assess investment prospects, mitigate risks, and enhance portfolios. It involves the use of Robo-advisors or automated wealth advisors. FinTech also includes blockchain and distributed ledger technology. These innovations are new ways to track, record, and store transactions.

Brokers

Before the advent of online trading, accessing a broker used to be a luxury reserved for the rich. Individual investors no longer need a broker to trade on the stock market. Many online services even offer commission-free trading. As a result, the job of the broker has changed. Although they still execute orders, many have expanded their services. They now offer personalized investment management to justify charging high commissions.

Institutional Investors

Institutional Investors are trusts, corporations, or other legal entities that invest in financial markets on behalf of groups or individuals. These institutions include pension plans, endowments, sovereign wealth funds, banks, foundations, and insurance companies, and they can invest funds for current and future generations. These entities have shifted towards investing in new asset classes. For example, they are investing in hedge funds and private equity real estate. They also use other alternative and illiquid investment vehicles.

How SIS International Research Helps Investment Managers

We can help Investment Management firms optimize their Assets Under Management. Our top-notch research analysts can also help with the diversification of portfolios. We offer a broad range of Qualitative and Quantitative Market Research options. Contact us now to discuss how we can help your Investment Management business.