Investor Redemption & AUM Analytics

The objective was to understand why investments were being redeemed, which customer and product segments were driving the pattern, and how the findings should influence retention, marketing, product development and pricing decisions. Rather than treating redemptions as a single portfolio-level ratio, the analysis decomposed AUM movement and investor behaviour to identify where management attention was most needed.

The firm was experiencing increasing pressure on investment retention as the average redemption-to-investment ratio rose. A portfolio-level view could show that the problem existed, but not explain its source. Management needed to distinguish market movement from sales effects, understand differences between new and existing customers, compare product-level behaviour, and identify customer attributes associated with high redemption activity.

• Analysed AUM movement over four years and within the fiscal year using a data warehouse and Tableau (daily refresh).
• Split existing vs new customers, then positive vs negative AUM movement, profiling each on personal, account and service attributes.
• Examined redemption-to-investment ratios by product and by sales-load status.

• AUM rose 65% over four years — attributable 105% to sales growth and −5% to market.
• Equity-fund AUM fell 32%, driven mostly by negative sales growth.
• Retail clients had the highest redemption-to-investment ratio at 97% vs a 79% company average.
• Transactions without a sales load were far more prone to redemption (84% vs 65%).

• Engaged an external consultant for in-depth interviews with high-redemption, low-AUM customers.
• Ran face-to-face and telephone surveys across three major cities and both low/high redemption groups.
• Used findings to set strategic direction on products, service and pricing.