Artificial Intelligence… Sure, Two Pints Please and a Packet of Salt & Vinegar!

GemCap Founder Stuart Alexander on the rise of AI – in beer brewing and fund sales – and its potential to free up sales teams to do what they do best.

Everywhere you turn AI is front and central. Hardly a day goes by without a conversation on the radio, on the news, or at a conference that isn’t talking about AI in some form or other. While out the other evening I even heard of a beer that had been brewed using AI. The Nethergate Brewery produced a very palatable beer called AiPA. Based in Long Melford, in the County of Suffolk, UK, Nethergate worked with AI to identify what makes the best beer from taste and colour to the right hops etc. What was clear, according to the Head Brewer Ian Carson, was that there was a lack of tactile wisdom and intuition that’s needed to craft the best beer possible. So, it ended up being a collaboration between the brewer and the AI tool. I had to search for this amazing brew, and I can tell you it was worth the expedition. A great combination of human expertise and digital intelligence.

In our industry, asset management, AI seems to have also taken centre stage albeit with a mixed response from different sections within the funds Industry. At last week’s Funds Congress hosted by PWC, Carne and Decherts, there was an excellent panel on AI and they covered the usual aspects in the industry, namely:

  • Alpha Generation
  • Managing Risk
  • Operational Efficiency

I will leave smarter people to opine on these but my pet subject, distribution, was not really covered and if you read the various papers on AI, it is barely covered there either. One article on fund distribution got excited about Zoom and Teams as the panacea for fund sales!

If AI can improve the customer experience of dealing with the purchase and information around a fund, then that can only be a positive step. Knowledge is everything: if you own the data then you own everything, so they say, and historically that knowledge was limited and controlled by the asset managers themselves and then distributed via a select number of data providers. The prescriptive element of this data meant it was difficult to truly analyse and conclude anything of consequence. But now AI is helping advisors to generate more insights, customise content more effectively, and deliver it to clients with greater agility and speed. The hold of the data providers is being eroded as advisors control the data directly and create a better understanding of the product. The same is true for fund managers.

In fund sales the development is slower as the requirement for “humans” is still pivotal, but many firms are now exploring new initiatives to try and make their sales teams better at what they do and, more importantly, better value for money. There are ideas around an AI-enabled digital interface for salespeople, for example. This would help deliver insights and recommendations to the salesperson in real time, based on the content of the client conversation, helping them to provide better client service and identify and progress new business conversations. Basically, KYC for a salesperson! Lucy Walker at AM Insights has created a tool that allows fund salespeople to know more about their own fund from a positioning point of view than previous incarnations have ever done. It tells a fund salesperson how their fund is doing relative to another that the fund buyer has. It helps position it and she has created a tool that builds knowledge into the sales process.

In reality around a third of a salesperson’s time is actually spent selling – which means two thirds is spent doing other things, such as coordination of administration duties and associated meetings. Sales technology such as Salesforce can obviously help with coordination and recording sales information and client details. AI should improve efficiencies but judging by the conversations I have had in recent days, most salespeople are not embracing AI. In fact, one Sales Director I spoke to said, “his team fear technology when they should be welcoming it”. Possibly they fear being caught out? Clearly the developments of digital marketing coordinated with the likes of Salesforce and Microsoft Co-Pilot helps take away some of the drudgery and low added value aspects of sending a standard email. But imagine if the technology could create an email that was bespoke. It spoke to the recipient directly about the holding in the fund they owned, did performance and competitor analysis, recognised the platforms the holder had the fund on… all automatically done at the press of a button. Why pay a salesperson £150,000 a year to send emails when AI can do it and do it better, leaving the salesperson to do what they do best: build relationships. Or as I say, “pick up the bl**dy phone” ….

I had the pleasure of speaking with Richard Philbin of Heartwood Investment Solutions recently. Richard is well known to many in the UK funds industry. An early adopter of technology, he was the first to use a laptop back in the 90s and then an iPad in meetings to take notes. Notes that he is justifiably proud of as they go back 30 years and as he says, “if the regulator ever came knocking, I have the written justification for choosing that fund in 1995!” He believes that if salespeople who come to see him don’t have the knowledge of not only what their fund does but, more importantly, what the allocation is, then they haven’t done their research. Equally he doesn’t want salespeople to tell him that the fund he has bought was wrong and that he should have bought theirs. Rookie error! He welcomes technology in creating a better experience when meeting salespeople. “Better knowledge and understanding are critical”, he says.

Speaking with James Calder of City Asset Management, again someone who has been round the block a few years and is not shy in sharing his views on all things sales, believes that if salespeople just wore out a bit more shoe leather to start with and had some more persistency about keeping in touch then that would be half the battle. “Any form of Intelligence in salespeople would be a win, never mind artificial”. He agrees that sales data and better knowledge of how funds should be positioned is critical and if AI can improve that for the sales team, then that can only be a good thing.

Because of COVID-19, the usage of Zoom, Teams, etc. has created a situation where salespeople are able to deliver solutions which are timely for fund buyers, and enable a more efficient interface between the fund and the fund buyer. Webinars via Zoom are common practice now, but equally the value of getting round a real table with potential fund buyers should never be underestimated.

Digital marketing/selling is important, but it is an ancillary to the real purpose of fund sales, namely positioning your fund in front of a fund buyer who wants to know more about your fund. James Calder says he rarely gets introduced to a new or established fund that he hasn’t found himself. What a great opportunity for smaller boutique managers who can embrace AI to get the digital selling machine in order, as many fund buyers won’t know about you until you make contact. Yes, the larger firms will be more economically efficient but the boutiques with their differentiation can really make hay whilst the AI sun shines.

In short there are a few developments in AI that really enhance the sales task at the present time, such as digital marketing, AM Insight and Microsoft Co-Pilot etc. We are still in the early stages of these developments, so it will be exciting to see how we progress and really appreciate what AI can do to help make distribution a better experience for all. Let’s never forget that it is a people industry after all.

Meanwhile I’m off for a pint of AiPA and a packet of crisps… enjoy your day in the sun!

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