The Boston-based analytics firm examines some of the trends in fintech and investment management in the Asian region.

Asian asset managers are increasingly entering partnerships with other managers in the region to explore how to ramp up revenue streams and cope with cost pressures. But many markets – apart from Singapore and Hong Kong – are difficult for foreign players to enter, a study says.

The findings come from Cerulli Associates' newly-released report, Asian Distribution Dynamics 2016: Responding to an Evolving Landscape.

Apart from Hong Kong and Singapore, most Asian markets are still inaccessible to foreign managers, with some markets, such as Taiwan and Korea, showing an increase in home bias, the report said. 

"An absence of distribution partners and lack of brand recognition are problems new entrants have to contend with and partnering with a local partner is seen as the best way to raise assets without a large initial investment," Shu Mei Chua, an associate director at Cerulli who led the report, said.

Strategic pacts are largely aimed at three key areas: asset growth potential, product development, and distribution dynamics, Chua continued.

Among recent developments, E Fund Management has entered into a partnership with Danske Capital to "jointly design and promote" investments. Korea's Samsung Asset Management and its sister company, Samsung Securities, together have four pacts with other Asian or global managers and serve as the prime example to either co-develop products or to bring recognisable global managers to Korean shores.

"While most partnerships entered into so far are targeting joint product developments, we expect strategic partnerships to get more creative in light of a tighter regulatory environment and the rise of financial technology," Chua said.

Alternatives
Many asset managers are looking to alternative methods of distribution in the region, which is dominated by brokerages and banks. Many have come to the conclusion that digital channels are set to play a big part in the next stage of distribution.

Digital marketing has already made headway in key markets in the region. Managers in China and India had the largest budget allocations to digital marketing among Asian markets and are using various digital tools to reach end investors.

"For instance, the use of messaging app WeChat to promote funds and provide investor education is considered indispensable for managers looking to gain customers in China," Ivan Han, a senior analyst with Cerulli, said in the same report. Robo-advisors are possibly on the cusp of disrupting the asset management industry in Asia in a positive way by forcing the industry to consider how to offer inexpensive, scalable advice to the majority of investors who are often ignored because they have smaller accounts, he added.

"Robo-advisory is more of a distribution story in that it allows managers to tap capital from investors who had been reluctant to invest in mutual funds due to a lack of advice," Han said.