The unpredictability of asset management

Markus Ruetimann says that in order to progress and flourish, the next stage of the technical evolution in his industry is likely to increase productivity and returns on investment at the cost of reward to labor
By Editorial
Markus Ruetimann

Markus Ruetimann says that in order to progress and flourish, the next stage of the technical evolution in his industry is likely to increase productivity and returns on investment at the cost of reward to labor

Raised and educated in Switzerland, Markus Ruetimann can look back on over 25 years in private banking, securities services and asset management in Zurich, New York and London. Now one of the longest serving asset management chief operating officers in London, Ruetimann cites “integrity, curiosity, focus and a sense of humor” as the key attributes underpinning his versatile professional career.

“During the last quarter century, how we do business has fundamentally and irreversibly changed,” says Ruetimann. “Self-regulation has been replaced by prescriptive regulation with many intended and unintended consequences, while rapid product innovation has reduced the longevity of client relationships as investors are chasing evolving opportunities.” In addition, he notes, “Transparency and competitive digitalization are recalibrating our industry’s revenue streams and corporate profitability; and technology continues to offer easy access to an unlimited amount of data.”

The Big Bang in the U.K. in 1986 was also the big bang for Ruetimann’s career. At that time he was working in New York for UBS. As London strengthened its position as a major financial center, Ruetimann was asked to become the COO of Philips & Drew’s fund management division, which had been acquired by UBS.

“The transfer from the Big Apple to the City of London transformed my professional life forever,” Ruetimann recalls. The operational challenges resulting from the Big Bang were enormous and required material investment in technology and talent.

The collapse of the London Stock Exchange’s TAURUS project in 1993 led to Ruetimann’s first significant board appointment in 1996. “Considering the operational and political complexities at the time, contributing to the creation of a new national central securities depository (CSD) was a real privilege and an unforgettable experience,” he remembers. He served on the Board of CREST for six years until 2002.

His experience of the cultural nuances in Switzerland, the U.S. and the U.K. proved a great help to Ruetimann when in 2000 he was asked to lead the operational integration of Philips & Drew (headquartered in London) and Brinson Partners (headquartered in Chicago), creating a new fund management company, UBS Global Asset Management. In summarizing that chapter of his career, he cites the Roman philosopher Seneca: “Difficulties strengthen the mind, as labor does the body.”

“I have been fortunate to have been given a number of opportunities to support the securities services industry in many different ways,” says Ruetimann. In 2002, he served on Omgeo’s board of managers at a critical stage in the firm’s evolution and joined the executive board of the International Securities Services Association (ISSA) in 2005. “ISSA is unique as it covers all constituencies in the financial intermediation chain,” he comments. He served on both boards for seven years.

Asked about an event that has most impacted the financial services industry during his career, Ruetimann names the invention of the worldwide web in 1990 as a defining moment in all our professional and personal lives. “The internet is now the most important communication tool in many societies around the globe,” he says.

“However, while technology has enabled our industry to progress and flourish, the next stage of the technical revolution is likely to increase productivity and returns on investment at the cost of reward to labor. New technologies are likely to disrupt time-tested operating models, eliminate as well as create jobs and make data a strategic asset.”

Ruetimann is now the group chief operating officer of Schroder Investment Management Limited. Since his arrival in late 2004, his team has created a global business platform that has successfully supported the firm in doubling its assets under management, in expanding its investment strategies and products and in enhancing its client servicing capabilities for institutional and retail investors, financial institutions and high-net-worth clients from around the world.

Since late 2010, he has also been a commissioner on the board of the Jersey Financial Services Commission. “Being able to contribute directly to regulation that both protects and advances the interests of an important jurisdiction such as Jersey is a great honor,” he comments.

Asked about the disruptive trends the industry is likely to face in future, Ruetimann responds that, “Apart from dealing with a tsunami of regulations, we must exploit opportunities and manage challenges arising from the digitization and explosive growth of unstructured data, be prepared for faster growth of complex investment solutions, as well as compete with new entrants in the online-only ‘robo’ wealth management space.”

Those firms with a broad talent pool, an agile operating model, an efficient governance structure and effective technology will have a competitive advantage over others. Nevertheless, Ruetimann is not given to rash forecasts. “When I started in this industry over 25 years ago, life was far more predictable than today,” he says.

–Richard Schwartz

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