Blog · Wallet share and penetration · Asset managers
Why an asset manager's distribution team should read assets and net flows per client side by side: the four quadrants they produce, how to compute net flows by client and strategy from subscriptions and redemptions without netting away a switch, and the quarterly list each quadrant becomes.
A distribution team that tracks assets alone sees a smooth picture. A client whose holdings rose with the market looks healthy while quietly redeeming. Net flows, read beside assets, split the book into four kinds of account that need four different conversations. This guide sets out the computation and the quadrants.
Per client:
Share = assets held ÷ client's wallet for the strategy type Net flow = subscriptions − redemptions, per strategy, per period
Net flows are computed per strategy first and summed to the client afterwards. Netting across strategies first hides a switch from one of your strategies to another as zero.
| Net inflow | Net outflow | |
|---|---|---|
| High share | Stable: protect and deepen | Retention: the account is leaving in instalments |
| Low share | Growth: the account is choosing you | Dormant or lost: decide whether to pursue |
Each quadrant is a list, and each list is a different meeting.
Client identifiers only.
TA net flows = Σ regions = Σ salespeople = Σ clients = Σ strategies
The by-strategy equality catches a strategy renamed mid-period.
Six clients, one salesperson, figures in millions.
| Client | Assets | Wallet | Share | Net flow | Quadrant |
|---|---|---|---|---|---|
| 2001 | 120 | 400 | 30% | +8 | Stable |
| 2002 | 45 | 900 | 5% | +22 | Growth |
| 2003 | 210 | 350 | 60% | −31 | Retention |
| 2004 | 15 | 600 | 2.5% | −2 | Dormant |
| 2005 | 80 | 200 | 40% | +1 | Stable |
| 2006 | 60 | 300 | 20% | −18 into 2006-B, +18 out | Switching |
Client 2003 is the retention conversation: the largest relationship on the desk, redeeming a seventh of it in one quarter. Client 2002 is the growth conversation: a small share of a large wallet, and the flows say the client is moving toward you. Client 2006 is neither; it moved from one of your strategies to another, which netted across strategies would have read as nothing.
Netting at the client level first. The switch in client 2006 vanishes. Net within strategy, then sum.
Market movement read as flow. Assets up, flows unknown, and the report says the client grew. Never infer flows from asset changes; use the transfer agent's subscriptions and redemptions.
Wallet basis inconsistent. Total assets for one client and strategy-type allocation for another puts them in the wrong quadrants. One basis per report.
Period cut differently across sources. Flows to the quarter end and assets to the month end. Cut both at the same date.
Mapped once, the transfer agent's export produces the four quadrants per salesperson every quarter, reconciled to the total flows, with the retention list on top. Covirage builds this from the export as it is, client identifiers only. The asset managers page describes the setup, and you can upload a sample flows file and see the roll-up on your own rows.
Assets move with markets. A client whose assets rose ten percent in a quarter when the market rose twelve is redeeming. Net flows strip the market out and show what the client actually did.
As an outflow from one strategy and an inflow to the other, per client. Netted across strategies it disappears, and the desk loses the one signal that says the client is repositioning rather than leaving.
The quarter for the review, the month for the trend. Both from the same rows. A single large redemption should be visible as a month, not smoothed into a quarter.