Asset managers failing to launch products

Product launches from asset managers will be another casualty of the economy, according to a study released today by Cerulli Associates Inc. of Boston.

Of the 40 asset management firms surveyed, 55% said they expect their product development budget to decrease in 2009.

A year earlier, when the same survey was conducted, 59% reported their budget was going to increase while only 12% reported a decline.

Budgetary constraints were cited as the number one reason followed by reduction in staff.

“Many asset managers are focusing on product rationalization, consolidation or efforts to raise assets,” said report author Pamela DeBolt in a statement.

“As a result, less time is being spent on innovation.”

It’s also taking more time to develop new products.

Among the firms that are planning new products, the top types of offerings are retirement income products, alternative investment products and global asset allocation products.

These are also the top three products in demand by advisers, the survey found.

“These are not your traditional mutual funds and there is more work involved in creating them,” Ms. DeBolt said.

Alternative investment products showed an increase over the 2007 survey.

A full 30% of those surveyed said their retail product plans focused on alternative investments, up from 19% in 2007.

The confidential questionnaire was completed in October and November 2008, and included a quantitative online survey and qualitative research interview with industry executives.