Asset managers are more willing to pay a premium for risk management services, including portfolio concentration, interest rate analysis and exposure and credit risk, according to a recent report.
Consultancy Accenture conducted a survey of fund managers and chief financial officers on investment banking. It found the “vast majority” of clients are generally satisfied with their bank and would recommend it to others. However, one third of those surveyed have changed their main investment bank in the last five years.
Nearly 70% of fund managers surveyed said price was the number one reason behind picking a bank, followed by research provided (58%), ability to tailor appropriate financial options (48%), and trading and execution capabilities (43%).
Research was still central to investment banking relationships, remaining a core product, but the survey found written reports had lost value compared to access to analysts and corporate executives.
Equity and equity derivative trading was the most frequently used service by buy-side firms (88%). Further down the list were equity research (84%) and a series of straightforward bank services such as lending (82%), corporate advisory (72%), foreign exchange (68%), debt (66%) and treasury operations (64%).
The survey found respondents were prepared to pay more for risk management services, followed by services associated with front-office trading, basic trading services, administrative issues, as well as research and offerings such as regulatory advisory services.
“From this we can conclude that the credit crisis has left all executives in any company more aware of the need for risk management services,” the report said.
According to Accenture, asset manager clients also value electronic trading, but continue to use traditional channels, often specifically to pay for research.
There is room for improvement however, with about half of asset managers surveyed saying their bank does not offer a website sufficiently useful for day-to-day communications.