Mary Callahan Erdoes, J.P. Morgan's CEO of Asset & Wealth Management: Top 10 Themes That Will Define the Future of Asset and Wealth Management

Top 10 Themes That Will Define the Future of Asset and Wealth Management

J. Pierpont Morgan would be proud that many of the historical tenets of the asset- and wealth-management industry still form the bedrock of how money is managed in modern times. J.P. Morgan’s first investment fund was started in the late 1800s to serve British financiers wishing to invest in the emerging United States of America. The fund’s 150-year track record is a testament to our industry’s founding principle: While the world may change, clients’ desire for investment expertise and personalized service won’t.

With that in mind, here are 10 key themes that we look forward to helping our clients navigate in the future.

1) Price. Ever since I entered the asset-management industry, skeptics have warned that fee pressure will destroy profitability and detract top talent from the profession. Fees in every industry compress at some point. Successful firms of the future will thrive by either providing commodity-like products at scale for near-zero cost, or delivering hard-to-access insights and exposures that command a premium. Our industry must strive for continuous improvement on both ends of the spectrum.

2) Scale is a matter of survival. With compressed pricing, heavy regulatory controls, and immense spend on data, analytics, and risk-management tools, firms need a relentless focus on operational efficiency, a rigorous control framework, and a disciplined prioritization process around investments for the future. In this context, scale is key. Mergers and acquisitions and outsourcing of sub-scale and noncore capabilities to service providers will enable smaller firms to refocus their efforts back into their most important asset: talent.

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3) Actively advising clients. If we learned anything from the Covid-19 crisis, it is the need for sound advice in volatile times. During that time, thousands of actively managed funds outperformed their passive alternatives across asset classes and portfolios. While markets may be efficient, manager selection is key and clients need guidance. The average industry return of a balanced portfolio over the past two decades was 6.4% annually, while the actual experience of the average retail investor was only 2.9%, a stark reminder of how critical hands-on advice is.

4) Impact and purpose. Portfolio managers and research analysts have become essential for investors seeking to make an impact in the world through their assets. Over 80% of surveyed CIOs expressed intent to invest in environmentally and socially conscious companies. Analyzing CEOs and their management teams is no longer just about inquiring about their financial and operational expertise and vision, but also about the impact they make on their communities and the planet. Rising demand for companies that drive positive change will create a virtuous cycle of asset allocation for good.

5) Personalization. Today’s investors want to be intentional, not passive, in investing. They care about taxes and want to overweight companies that can make a difference. They want to avoid whole sectors, or actively own and vote on a company’s strategic plans. Giving clients the freedom to pursue their very specific objectives in a highly customized manner will continue to drive innovation in our industry.

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6) Stable and predictable incomes. Millions of investors around the world have come to rely on their investment portfolios as a stable source of income. With individuals enjoying longer life spans and more active lifestyles, especially during retirement years, asset managers need to adapt their strategies to provide for a stable and predictable flow of income every month. Along the same lines, saving needs to start at a young age. Today, less than 40% of Americans have enough savings to pay for an unexpected $1,000 expense in cash. It is our collective responsibility to educate and advise on what is required to cover all of life’s events and milestones.

7) Understanding China. The pandemic has highlighted the interconnectivity of the world and how important China is to supply chains and new innovations. Against this backdrop, it is irresponsible to be a fiduciary of client capital and not have a deep understanding of places like China. It is hard to imagine having a true grasp of competitive global forces without on-the-ground insights of the economies, cultures, and politics of re-emerging global marketplaces. After 100 years of being on the ground in China, J.P. Morgan is poised to become the first foreign asset manager to acquire full ownership of a Chinese fund manager, pending regulatory approval. That kind of commitment will contribute massively to our global research network.

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8) Technology drives everything. To adapt to the velocity of progress and change, technology is providing our industry access, speed, and agility like never before. With more technologists than Google and Facebook combined, J.P. Morgan invests over $12 billion annually in technology to help empower our clients and employees to work faster and more seamlessly in ever-changing markets. We need to be forward thinking and have the ability to be a disruptor. Agile, collaborative partnerships between technologists and their businesses will drive innovation and speed to market at an exponential pace.

9) Access. With a global footprint and a full suite of investment vehicles, asset managers must continue to focus on enabling first-time investors to invest in previously inaccessible areas. We are finding ways to provide more opportunities, more choice, and more power to people. Investments once only available to the largest investors in the world are now being accessed by the everyday investor. Democratization of markets should create better outcomes for investors of all sizes. 

10) A new flexibility. Our industry adapted quite seamlessly to a previously unimaginable work-from-home scenario. As such, increased flexibility will broaden talent pools and should promote greater diversity. While never losing the apprenticeship nature of our business, we should continue to find new ways of working with one another to generate even greater success.

In coming years, the industry’s winners will remain obsessed about their fiduciary responsibilities. As stewards of capital, the ability to leverage technology and scale to deliver the same extraordinary experience for every investor, with $100 or $100 million, is now within reach.

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ByteDance IPO Business Chinese Mandarin | Interactive Course

As of November 2018, ByteDance had over 800 million daily active users (over 1 billion accumulated users) across all of its content platforms. The valuation of ByteDance was approaching USD 400 billion for private-equity investors in Apr 2021. It was claimed that revenue is mainly generated from Douyin and Toutiao, through advertising by pushing them to the target segment. Keep reading to see how the algorithm works.

ByteDance chose to go for a unique path since its establishment in 2012. Among all Chinese Internet companies, ByteDance is the first startup not receiving support or investment from Alibaba, Tencent and Baidu. In contrast, ByteDance is considered a competitor to those tech giants. Furthermore, ByteDance aims at competing with Google and Facebook.

We may attribute the success of ByteDance to its Bytedance’ artificial intelligence (AI) application and machine learning, which is APPs like Douyin(Tiktok) and Toutiao push news and videos to people “based on their interests”. The founder and CEO Zhang Yiming, who has announced to step down in late 2021, once emphasized that Toutiao was not a news application, but an AI one in the social media business. The innovative ideas can greatly increase the time consumers’ spent on the APPs as all content are tailored for them according to what they have browsed and liked previously. The more the users, the greater the database to generate a more accurate report for choosing which content to be delivered to an individual.

Although all statistic looks good for ByteDance as an IPO, it was denying the rumours of it going public in Apr 2021. With that being said, people still believes IPO is their ultimate target.

Key takeaways in class:

• Possible Reasons for ByteDance Founder Zhang Yiming Stepping Down

• Business Model of ByteDance from Douyin(Tiktok), Xigua Video and Toutiao

• The US-China Trade War

Finance Mandarin offers 1 on 1 and group Mandarin Coaching for Business Purposes with Finance Focus materials. Enrol 1 on 1 session anytime and anywhere. And Group class.

With Harvard-MBA approved case methodology.

Buy your ticket for ByteDance IPO Plan Q&A, over 1300 registration received on LinkedIn!

6 Facts You Need To Learn About Xiaohongshu 小红书 | Learn Business Mandarin with Vienne Lee

Vienne Lee and Debbie Chen hosted a Xiaohongshu IPO LIVE event on 4 June 2021, 9.30 a.m. They discussed the key leaders of Xiaohongshu, explored its business model and challenges. At Finance Mandarin, we provide the latest market insights and case studies to help corporate leaders master the Mandarin language skills, to prepare for Mandarin communication with Chinese clients.

What is Xiaohongshu？

Xiaohongshu is an e-commerce （电商）and social media platform （社交平台）that allows users to share their product feedback and lifestyles. It has over 300 million users worldwide.

What is 种草？

种草 (seeding/grass plating) is a network term created on Xiaohongshu’s platform. It means to be influenced to purchase something. Hence, the consumer’s purchasing behavior is greatly influenced by KOLs and KOCs. This has created a large e-commerce and advertisement platform for Xiaohongshu.

By studying this case study, you will be able to:

✔️ Identify the listed capital of Xiaohongshu

✔️ Realize the investment from well-known institutions

✔️ Predict potential challenges

✔️ Analyze the competitiveness

Vienne has prepared 8 real case studies about Xiaohongshu. Learn more at Finance Mandarin.

Connect with Vienne Lee to book a course

Coaching Business Mandarin for Executive Leaders

You learn, you earn

“Hong Kong Bankers need to Speak Better Mandarin. That's Why they Come to me”

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“If an interviewer at a bank in Hong Kong wants to find out how well you speak Chinese, they won’t ask you ‘how good is your Mandarin?’”, says Vienne Lee, director of language coaching company Business Mandarin. “They’ll just ask a normal question like ‘can you compare Tencent and Alibaba’s business models?’ and see how well you respond in Mandarin.”

Since setting up her company in the late 1990s, Lee has tasked herself with improving the Mandarin skills of some of Hong Kong’s leading bankers at firms such as J.P. Morgan, Goldman Sachs, Morgan Stanley, HSBC, UBS, and BlackRock.

Over the past year, as Western banks have cut jobs in Hong Kong and Chinese firms have increased their hiring, Lee has seen an uptick in unemployed financial professionals seeking assistance with their job searches.

“We’re also working with more bankers who are on gardening leave or are setting up their own hedge funds or family offices,” she says. “We polish their Mandarin communication skills for the finance sector, and coach them about building networks and interviewing.”

But Mandarin isn’t only important when you’re looking for work. Lee, whose firm focuses on financial services and mainly takes on clients at the VP level and above, helps bankers perform better on the job.

“I recently had an Australian client who was able to complete an opening presentation to 170 people in Chinese – it went extremely well, with applause in all the right places,” she says. “If you can go from nothing to making a speech to a Chinese audience, it also shows your colleagues and clients that you’re committed to doing business in China.”

Western finance professionals operating in China and living in Hong Kong – whether they are complete beginners or already know some Mandarin – make up about 60% of Lee’s students.

Another 20% are Cantonese-speaking Hongkongers whose written Chinese is good but who want to polish their Mandarin pronunciation. “Thirdly, we teach overseas-born Chinese who speak a bit of basic Mandarin at home, but can’t cut it in the Chinese financial world so need help with terminology in areas like due diligence, modeling, and valuation.”

Whatever their background, most bankers find learning Mandarin challenging. “Sometimes they don’t have enough time for classes and revision. And there’s the sheer volume of financial terminology and the difficult tones and grammar,” says Lee.

Understanding the Chinese Business Culture

She also helps Westerners adjust to the different presentation styles they will encounter in China. “For example, they often think it’s necessary to make a joke at the start of a speech and play themselves down,” explains Lee.

“But in China, you need to show people you’re the boss – especially if you’re presenting to them for the first time – otherwise they won’t look up to you as a role model. When we’re coaching people, we show them speeches from Chinese business and political leaders,” she adds.

The growing importance of Mandarin

Lee says she always had a “passion” for the Chinese language. After organizing financial conferences in 1998 – soon after China assumed sovereignty over Hong Kong – she realized that Mandarin would become increasingly important to banking careers in her city.

“The conferences connected me to more than 1,000 people in the finance sector. And I saw a gap in the market: bankers wanted presentation, pitching, and interviewing skills in Mandarin that were tailored to the technical needs of their jobs,” she says. “To secure Chinese deals, you need to understand China – both its language and its culture.”

Coaching Business Mandarin for Executive Leaders

You learn, you earn

Laugh and Share | Lunch with Finance Mandarin Students

Vienne and two loyal fans students, Ning and Mireille had a great lunch in a gorgeous modern Chinese Restaurant (Duckee) in Lee Garden Causeway Bay today, 3 June 2021.

When women sit at a table, there are always sharing. The three experienced ladies, an educator, an M&A banker and an ex-equity sales head, discussed job markets in the capital market, from sell-side to buy-side, as an appetizer.

Moving to the main course, e-commerce in China is now on the rise. The power of it can never be neglected, in particular, annual active consumers of China's largest mobile commerce platform, Taobao, reached 674 million as of June 30, 2019. 

In light of that, Mireille and Vienne taught Ning how to use Taobao to buy a Mask, to witness the power of China e-commerce together. 

They also joked about opening a shop on WeChat, one of the biggest China e-commerce platform.

When it comes to dessert, the beauties love it. Taking about beauty and health, living a positive lifestyle from different perspectives. And also how to prevent the sun from burning while playing golf. I believe everyone would love to hear this; we all have our own little tips. 

With the soft lighting and the relaxing atmosphere, the ladies who were not supposed to eat sweet today, enjoyed their treats in laughter. 

About Finance Mandarin

Finance Mandarin is an AI+Education company. We are the trusted communication advisors to the world's leading businesses, governments, and institutions.

We work with leading organizations across the private, public and social sectors at which they have connections with China.

Our scale, scope, and knowledge allow us to address problems that no one else can. We have deep functional and industry expertise as well as the breadth of geographical reach.

The expert for learning Chinese for Business Purpose: AI+FinTech + IPO +M&A

Visit us at www.FinanceMandarin.com for more information. Finance Mandarin is an AI+Education company. We are the trusted communication advisors to the world's leading businesses, governments, and institutions. We work with leading organizations across the private, public and social sectors at which they have connections with China.

Contact Vienne Lee for course review.

Website: www.FinanceMandarin.com

Email: VienneLee@FinanceMandarin.com