Utilizing sophisticated trading platforms, algorithmic trading, and artificial intelligence to scale insights can improve trading efficiency, reduce costs, and enhance execution capabilities, according to Ryan Hicke, CEO, SEI.
He said that traders can enhance their quantitative skills to effectively analyze and interpret complex financial data, supporting the development of quantitative trading strategies that can mitigate slippage in an increasingly competitive market environment.
“Traders can leverage advanced data analytics techniques to gain deeper insights into market trends, market microstructure, and risk management, leading to more informed trading decisions that can add value over time,” he added.
Those are the issues that traders can try to resolve to improve asset management, Hicke said, adding that “the asset management industry has become highly competitive, making it challenging for firms to attract and retain clients”.
According to Hicke, the biggest challenges facing the asset management industry include regulatory pressures, market volatility and uncertainty, fee compression and changing investor preferences.
He said that evolving regulatory frameworks are requiring asset managers to comply quickly with complex rules and reporting requirements, adding “operational costs and increasing compliance burdens for asset managers”.
In addition, fluctuations in the financial markets coupled with geopolitical events pose challenges to asset managers who are working to manage risk effectively and achieve more consistent returns, according to Hicke.
“There is a growing pressure on asset management fees due to increased competition and the rise of passive investing, both of which have put downward pressures on margins,” he said.
Finally, investors are increasingly seeking more customized and tailored investment solutions, requiring asset managers to adapt their strategies, solutions, or product offerings, he said.
In order to raise a buy-side industry firm profile and to support change where it’s needed, traders should actively participate in industry events, conferences, and forums, which can provide opportunities to network with buy-side professionals to exchange ideas and build relationships, according to Hicke.
“Traders can establish themselves as industry experts by publishing research and acting as resources for white papers or articles on relevant topics. Sharing insights and best practices can help raise their profile and drive change,” he said.
Hicke also advised traders to join and actively participate in buy-side industry associations such as The Security Traders Association of NY (STANY) or the Investment Traders Association of Philadelphia (ITAP).
“They can provide a platform for Traders to voice concerns, advocate for change, and collaborate on industry-wide initiatives,” he said.
Hicke added that developing strong relationships with buy-side clients through regular communication to understand their needs and deliver value-added services can support change by gaining client trust and loyalty.
Expressing his view on the use of technology in asset management, Hicke said that automation and digitization of processes, such as trade execution, portfolio management, and reporting can streamline operations, reduce costs, and enhance accuracy.
“Advanced data analytics techniques, including machine learning and natural language processing, can uncover valuable insights from vast amounts of financial data, improving investment decisions and risk management,” he said.
Hicke added that technology-driven platforms can provide investors with user-friendly interfaces, personalized recommendations, and real-time access to portfolio information, enhancing client satisfaction.
He further said that technology solutions can help asset managers meet regulatory requirements more efficiently, such as automating reporting processes and ensuring data integrity and security.
Hicke thinks that by implementing advanced analytics tools and technology platforms, the front office can gain better insights into market trends, identify investment opportunities, and optimize portfolio allocations.
“A transformed front office can provide personalized client experiences, leveraging technology to deliver tailored investment solutions and real-time communication channels, fostering stronger client relationships,” he said.
“Automating manual tasks, such as trade execution, order management, and compliance monitoring can free up time for front-office professionals, allowing them to focus on value-added activities like client interaction and research,” he added.
