According to Magellan Advisory Partners' Distribution Barometer 2023, decreased bonuses (30%) were one of the key reasons distribution heads across EMEA, APAC and North America expect departures from their teams.
Hiring remains a candidates' market, with strong salespeople being approached for an average of three to four roles with competitive packages, another key concern for distribution heads (33%).
The pandemic has brought many changes to the world of work, including an opportunity for staff to re-evaluate what they want from their careers.
Both career breaks and retirement (10%) have caused an exodus from distribution teams as staff consider what they want from their lives, while the ability to work from home or abroad has also driven individuals to assess their work/life balance, with inflexible companies set to lose out.
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Another multi-year trend impacting staff turnover is the continued drive of M&A in asset management, and companies can find themselves in danger of losing distribution staff if they do not resolve duplicate roles or incompatible cultures.
Despite this, 75% of respondents to the barometer believe these turnover concerns can be managed with better company culture and room for personal development.
Teams are also looking to expand teams as well as retain staff, with 54% of respondents aiming to increase their headcount over 2023, although this is down significantly from last year's 83% figure.
One area of expansion set to take a hit this year is private markets, as the industry begins to coalesce around the best method to structure these sales teams.
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In 2022, 21% of distribution heads favoured a dedicated alternative sales team, but this has fallen to just 10% over the coming twelve months.
Instead, dedicated strategy specialists supporting a generalist sales team is the preferred approach, with 72% of respondents opting for this option.
Diversity and inclusion
An overwhelming 97% of respondents said they will have an "active focus" on improving diversity and inclusion across their sales teams, but this figure does not translate when asked about specific policies.
Only 28% of total respondents said they would focus on gender diversity, with 26% confirming a focus on race and ethnic diversity, and just 13% looking at social mobility.
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These figures drop further still when turning to returners, with just 12% of respondents actively focusing on policies for staff returning from extended periods of leave.
Only 10% said they would focus on LGBTQ+ policies while hiring, with 8% offering some awareness of neurodiversity and just 4% will focus on disability.
Key challenges
A variety of issues await asset managers in 2023, with the macroeconomic environment most concerning to distribution heads.
Almost a third (31%) cited this as the key challenge in the coming 12 months as market volatility, high inflation, a recessionary environment and the depressed outlooked for equity markets loom large.
Fee pressure (17%) also worried respondents for a variety of reasons, with a decreasing asset base, the consolidation of clients and pressure on active performance among those cited, while geopolitical factors (11%) concerned others.
Increased regulation (11%), dwindling investor confidence (11%) and industry consolidation (11%) were among the other key challenges cited by respondents.