What does the new platform model mean for the investor/fund relationship?

11 May 2021, Jonathan Greenwold

What does the new platform model mean for the investor/fund relationship?

Be it Deliveroo reshaping the take-away industry; Airbnb revolutionising the holiday rental market; or Uber, used by 40 million customers a month, which has upended the taxi industry – new developments in the technology behind an existing model have had a staggering effect. While all these examples, understandably, took time to bed in and be fully adopted by users, there is no doubt surrounding their current popularity, both regarding the users of their products as well as the original vendors. It’s clear that having a single, secure and convenient access point to a selection of sellers is a successful model to emulate.

However, as anyone familiar with the financial services platform industry can testify, we haven’t kept up with this curve. Rather than connecting a range of vendors and buyers in one marketplace, many are still using a decentralised approach – whereby each seller creates their own access point, disconnected from its peers and each requiring its own back office systems and individual client base. Not only is this wasteful of both time and money, on both sides of the investor/ asset manager relationship, but is also, arguably, hampering new vendors from flourishing in the market and ultimately reducing choice for the buyers.

Happily, this trend is set to change as a new allocation model with a raft of technological improvements is introduced – indeed at AMX we are dedicated to disrupting the ‘old’ model and offering investors and managers a more accessible, transparent and faster marketplace.

We believe that this innovation will have hugely positive effects on the relationships between investors and the funds in which they are investing. Technological advancements will empower investors – making it easier for them to access a range of products and offerings as well as allowing more informative and increasingly secure monitoring of their investments.

Whilst we know that some managers may initially shy away from this improved transparency, we truly believe that the greater understanding and clarity brought about by an advanced platform will be beneficial for users on both sides. More interactive reporting, whereby clients can see and use reports at their leisure, could actually be used to reinforce client and manager relationships and better demonstrate to the client the value they are receiving. Moreover, this knowledge will enable clients to understand more – and as a result have a deeper engagement with their managers and appreciation of the service they are providing.

Technology is often used to provide faster, better and cheaper solutions to an existing market. When looking at the platform market, on top of these benefits we think that disruptive and innovative technology can also be used to empower investors and, perhaps more importantly, strengthen investor and manager relationships. The future of the industry is upon us and we are excited to be a part of it.