Facing fee compression, rising costs, and the growing popularity of passive funds, asset managers are under increasing pressure to optimize profitability. In order to meet the demands of stakeholders and clients, you must understand precisely which desks, clients, products, regions, and channels are contributing to — or dragging down — your margins. The pressure is on to make smarter, data-backed decisions that optimize profitability.
Yet, for many firms, a clear view remains elusive. On paper, your product lineup looks healthy. But blend the economics of an exchange-traded fund (ETF), a mutual fund share class, a separately managed account (SMA), and an alternatives strategy into one average and you flatten their distinct costs and profit profiles.
Critical details like true cost-to-serve, specific revenue-sharing agreements, servicing tiers, and expense caps often sit as after-the-fact adjustments buried in spreadsheets. This creates a gap between perceived and actual performance, leading to strategic missteps. By the time your finance team reconciles exceptions, product or distribution has already committed to pricing, rebates, marketing spend, or roadmap bets.
You’ve seen the warning signs in reviews and investment committee (IC) meetings:
- The uncomfortable question: Why did a product hit its volume targets but miss its margin guardrails once the real costs landed?
- The frustration: A fund looks profitable on paper, but once you account for fee waivers and servicing costs, it’s silently eroding your bottom line.
- The debate: Which product should we scale, sunset, or re-price? No one can agree because no one can trace how the numbers were built.
The unseen complexity behind every number
Complexity accelerates as you add products, share classes, intermediaries, and agreements. Each exception becomes another spreadsheet tab. Over time, your rules turn opaque, product and client views drift apart, and scenario refreshes take days or weeks.
Without one governed model to reconcile product, share class, client, and intermediary economics, stakeholders arrive armed with competing truths — and decisions default to heuristics and history.
Make product economics defensible
You don’t need a moonshot overhaul; you need clarity fast enough to change the meeting outcome.
Make every driver behind a product’s profit and loss (P&L) explainable and traceable. Tie platform fees, servicing costs, and revenue sharing to visible, drillable drivers. Maintain a single governed model where product, share class, client, and intermediary views reconcile, so conversations shift from lineage to action.
Bring “what-if” scenario planning into the room: pressure-test pricing, rebates, and mix shifts live — before you commit. Then apply margin guardrails that surface when a proposed change or portfolio mix pushes a product below target.
The payoff: better product calls, faster
Once product-level economics are visible and defensible, decisions improve quickly:
- Price with conviction by aligning fees to true cost to serve and target margins
- Fund the winners by shifting investment toward products that clear guardrails at realistic mixes
- Rationalize with facts by sunsetting or re-scoping underperformers with a clear line of sight to P&L impact
- Speed up governance as IC and product councils spend less time debating lineage and more time deciding
How the Anaplan Profitability Analysis application helps
Built with asset managers in mind, the Anaplan Profitability Analysis application gives your finance and product teams a governed, transparent way to plan and analyze profitability by product — and extend to clients and channels when ready.
With the Anaplan Profitability Analysis application, your team can experience faster time to value, connecting strategy to financial impact:
- End the data debates with transparent, drillable allocations. Tie every product cost and revenue rule to visible drivers, and drill from consolidated results to product, share class, or intermediary when needed.
- Make decisions in the meeting with “what-if” scenario modeling and analysis. Test the impact of fee changes, waivers, pricing, and portfolio mix scenarios in real-time, not next week.
- Stop bad decisions before they happen with margin guardrails and alerts. See instantly when a decision or mix shift pushes a product below target.
- Align teams with a single source of truth. Integrations to portfolio and general ledger systems ensure consistent definitions across planning and reporting.
