Understanding asset management RFPs

asset management rfp

The asset management RFP process is a crucial one for financial institutions looking to grow. Globally, $11 trillion of revenue is won every year through RFPs, so an iron-clad and efficient RFP response process can be a significant boon for business. 

RFPs – or Request for Proposals – are documents issued by organizations looking to vet vendors. Organizations seeking asset management services will issue RFPs to learn more about what potential partners have to offer. RFPs are often lengthy, asking financial service providers questions about virtually every facet of their business. 

Asset management RFPs can go by many different names, such as:

  • Asset management RFP
  • Investment management RFP
  • Investment RFP
  • Investment consultant RFP
  • Investment advisor RFP
  • Investment consultant RFP

A consistent RFP win rate can be mission-critical for financial institutions. But most asset management RFP response functions are strained, with asset managers saying they’re “drowning in RFPs.” On average, it can take more than 40 hours to respond to every RFP, a complex process that involves orchestrating cross-functional participation from SMEs (subject matter experts like portfolio managers), curating the right content, navigating disparate organizational knowledge bases and producing an eye-catching proposal that makes a mark. 

In an environment where organizations are seeking to maximize value while minimizing risk, the number of RFPs institutional investors are issuing is not only increasing, but each RFP is also getting lengthier and more complex. For financial firms, responding to these challenges requires even more work from already burdened proposal management functions, which often rely on manual and inefficient processes. 

But that doesn’t have to be the case. There are a number of key ways your firm could infuse your asset management RFP process with automation and efficiencies that’ll significantly cut response time and increase your win rate. In this article, we’ll cover everything you need to know about asset management RFPs, exploring how RFPs play a critical role in investment management and what steps your organization can take to strengthen your RFP response process to win more business, faster.

The purpose of RFPs in asset management

Any RFP has two key players: the issuing organization and the responding business. When it comes to asset management, organizations in need of an investment management solution will issue RFPs and DDQs (Due Diligence Questionnaires) to evaluate all aspects of a potential financial services partner. Asset management providers will respond to these information requests in a bid to win business.

How investors use RFPs

There are many types of organizations that issue asset management RFPs, including:

  • Endowments
  • Non-profits
  • Foundations and associations
  • Businesses with 401(k) or 403(b) retirement plans
  • Municipalities with pension plans

RFPs have always been a cornerstone of institutional investing for issuing organizations seeking to evaluate all aspects of a potential partnership. These structured requests allow organizations seeking asset management services to gather as much information as possible so that they can make the right decision when it comes to choosing a financial partner. 

But in recent years, as organizations have increasingly focused on customization and risk management, RFPs have gotten longer with more complex and specific questions. This makes sense for investors: They want to do their full due diligence to make sure they are endowing a high-stakes mandate with the right money manager. 

For financial services providers, however, this has complicated the asset management RFP process, requiring proposal coordinators to dig deeper and work faster just to maintain benchmark win rates – let alone improve on them to secure more business. 

How prospective firms use RFPs

For firms offering asset management services, RFPs are a critical component of building high-value partnerships that generate a steady stream of revenue. RFPs are often the best chance a prospective firm will have to demonstrate the value they offer to investing organizations.

Getting invited to participate in an RFP is quite momentous: it means that you’ve made the shortlist and that the issuing organization is seriously considering your firm’s services. An efficient, repeatable RFP response process can be a surefire way to win business, but prospective firms are struggling. A recent survey reported that 91 percent of asset managers say they struggle to meet RFP deadlines. 

Though RFPs are increasingly diverse in the information they seek, the basic components and completion steps are relatively the same for each one. Understanding the core structure of asset management RFPs and dissecting the response process are critical first steps to discovering how to then implement efficiencies that’ll decrease response time while improving the quality of RFP submissions (without adding headout). 

Key components of an asset management RFP

There are a number of elements that almost every organization seeking investment services will include in their asset management RFP. Here’s the general structure of these information requests:

  • Company Overview. The issuing organization will provide a general summary of their mission and detail what they’re looking for. 
  • Requirements. Investing organizations will often provide details about the types of accounts and balances they’re investing in, describe their oversight procedures (e.g., investment committee members, physical meeting requirements, etc.), detail the scope of services they need and relay specific criteria for selection like compliance and experience requirements. 
  • RFP process overview. Each RFP will also come with a timeline detailing when submissions are due and when selections will be made. Issuing organizations will also sometimes provide details about who is invited to participate.
  • Questionnaire. This is the meat of the RFP. Issuing organizations will customize the questions they ask, but they’ll generally address the following topics:
    • Vendor information – Company name, contact info, ownership, size
    • Primary contact –  Who is in charge of the RFP process?
    • Company background – History of your organization, status, insurance coverage
    • People – Information about your firm as a whole and the specific team(s) that will service the account
    • Philosophy – What is your firm’s approach to the services required?
    • Process – How does your firm operate? What will day-to-day interactions look like?
    • Performance – How do you report results? Who will be involved? How often?
    • Pricing – What are the costs? Do you have a standard pricing model?

The RFP process for asset management

Although details and complexities can vary considerably depending on the specific content of the RFP issued, the basic framework to completing an asset management RFP are more or less the same every time. 

Here are some basic steps to consider for every RFP response process.

Step 1: Go/no-go

We’ve already highlighted the fact that the number of RFPs being issued by investors is only increasing – and the quality of the information they’re seeking is getting deeper. 

Responding to each RFP that comes in the door is not necessarily the best thing to do. Instead, choose the ones that best align with your business and those that you deem are most winnable. To automate this analysis with data and AI, use an RFP software solution like Responsive. 

Step 2: Kick off

Organize a kick off call (or party!) with all of the key players. Define team and individual roles, walk through timeline and relay core objectives.

Step 3: First draft

Take a stab at a first draft. Roughly 80 percent of an RFP contains questions you’ve probably answered before, so a lot of the work is already done for you.

RFP software can take care of this step instantly for you, using your content library and past proposals to populate answers. Platforms like Responsive even have AI tools that can customize answers so they feel more individualized.

Step 4: Second draft

Completing your first draft will reveal what holes you still need to fill. Oftentimes, this will be new information that you haven’t provided previously. Proposal teams will likely need to recruit the participation of SMEs and other stakeholders at this step to provide their expertise.

Step 5: Review, revise and elevate

Do a thorough review of your RFP response making sure all of the information is relevant and accurate. Be sure that all supporting documentation is attached.

A lot of what sets a great RFP response apart from a good one comes down to presentation. Enhance your proposal with visuals like charts, images, tables and graphs that make it easy to understand your points at a glance.

Step 6: Submit

Once your response is polished and approved, submit it ahead of the deadline. 

Step 7: Save and audit your responses

Because many RFPs ask similar questions, every answer is potentially valuable for a future RFP. Store your answers in an easily accessible and searchable location. RFP software does this for you automatically, saving time and organizing your content in a centralized repository.

Step 8: Postmortem

For particularly challenging RFPs, consider holding a postmortem to assess how you conducted your process. Together with SMEs and stakeholders, discuss what worked and what you’d like to do differently next time.

Common challenges of the RFP response process

As we’ve discussed, crafting winning asset management RFP responses is only getting more challenging as organizations issue more RFPs that are lengthier and more complex. There are also additional obstacles that can negatively impact your firm’s ability to get a winning RFP response done in time.

RFPs can ask for a monumental amount of information

RFPs can contain up to thousands of questions and specific information requests. Depending on the size of an RFP, it can take multiple weeks to prepare a response. 

On average, most proposal managers devote about 40 hours to a single RFP response. Considering that these individuals are often responding to several RFPs simultaneously, it’s unsurprising that the vast majority struggle to keep up with deadlines. 

Company knowledge is often dispersed

The type of information issuing organizations seek is specific and diverse. To successfully answer the questions, RFP response teams need to search through existing company knowledge bases for the right information and stay organized with all of the content they’re amassing. 

Because company knowledge is often decentralized across different systems, repositories and file types, this crucial task can often feel like a frustrating treasure hunt.

A winning RFP is a product of collaboration

Successfully winning an RFP bid often entails collaborating cross-functionally with as many as a dozen people – if not more. For proposal coordinators, garnering this participation can be a scheduling nightmare, especially at global organizations where key stakeholders and SMEs may not even be working at the same time. 

Best practices for the asset management RFP process

The challenges explored above are not insurmountable. With the right approaches and workflows, your firm can develop a smooth, repeatable response process that moves swiftly.

Here are some best practices to infuse into your asset management RFP process.

Bid strategically

Not every RFP is created equally when it comes to your firm’s ability to win. Why waste time on RFPs that are not a good fit for your company? 

To avoid draining resources, make sure you make a bid or no-bid decision at the top of any RFP process. Consider the following:

  • Do you have a pre-existing relationship with the issuing organization? Were you specifically invited to respond or is this a general call?
  • Is your company a good fit? What changes would you have to make to your operating model to successfully serve this client?
  • Is your pricing compatible with the investor’s budget?
  • Can you meet the prospect’s timeline?

Collaborate effectively with a clearly defined team

Whether or not your firm has a dedicated proposal management team, a successful RFP response will require the participation of as many as a dozen different SMEs and stakeholders from across your organization such as the executive team, legal, HR, IT, sales, customer success, account managers, operations, finance, etc.

To ensure everything goes off without a hitch, be transparent and communicative about what’s needed from these colleagues and set expectations for timely stakeholder engagement.

Infuse your RFP responses with storytelling

Telling your organization’s story in a compelling way helps make your RFP response memorable. It’s human nature to be drawn to narratives – it’s how we organize our lives and construct our sense of self. Stories are remembered up to 22 times more than statistics, so harness narrative to humanize your firm.

Elevate your RFP response with the story of your company, including details about your mission, organizational culture and the impacts you’ve had on your clients.

Make a visual splash

RFPs can be densely packed with a lot of information. Think carefully about how to most effectively present your proposal so that it’s easily digestible.

Be sure to support your answers with images, tables, charts, graphs and other visuals. These non-text elements are key to driving your points home and creating a multimedia document that is a true reflection of your brand equity.

Find an RFP software solution partner

We’ve explored at length the challenges inherent in the asset management RFP process. With the amount of complex work required to craft a winning proposal, harnessing automation and other technological advantages is crucial to operating a sustainable, efficient response process.

Maturing your response process will be a massive game-changer for your business. A recent study conducted by Responsive and Callan Consulting found that companies using RFP software are yielding a 16 percent higher win rate and generating 34 percent more revenue than their counterparts. 

Asset management RFP software equips you with a slate of proposal management tools that will reduce your response time to mere hours while improving the quality of your proposals with AI, data and other efficiencies. 

How Responsive can help you win more asset management RFPs

Responsive is the #1 RFP software solution according to G2 for four years and counting, trusted by the leading companies around the world like ADP, Atlassian, BlackRock, Dow Jones, Google, Microsoft and SAP.

As a complete strategic response management (SRM) platform, Responsive empowers financial institutions and asset management providers to swiftly respond to every information request, including RFPs, RFIs, ESGs, DDQs, security questionnaires and more. With knowledge management features like LookUp, a robust AI-powered content library and in-platform collaboration tools, Responsive accelerates the response process by automating tedious and repetitive tasks while enabling seamless cross-functional collaboration and communication. 

Gain a major competitive edge: Schedule a custom demo to see how Responsive can invigorate your asset management RFP process. 

Joe Kopyt

Joe Kopyt is a NYC-based B2B marketing leader helping companies shape their narratives and generate demand. Connect with him on LinkedIn.

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