How asset managers are thinking differently about vendor relationships in 2025

Many firms have accumulated technology vendors the same way they've gathered assets: one opportunity at a time, without much thought to how everything fits together. The result is a patchwork of systems that may just create more problems than it solves. 

In light of a changing technological landscape and in the era of agentic AI and machine learning, we see asset managers quietly moving away from this approach. Foregoing the budget and resource draining effects of a complete tech stack overhaul, they're taking more strategic steps toward selecting and onboarding their partners.  

The cost of vendor sprawl 

Every asset manager has lived this scenario: a simple request that should take minutes stretches into days because it requires data from three different systems, each managed by a different vendor, none of which integrate properly. 

Or the fund launch that gets delayed because one provider needs information in a format that another can't produce. Or the regulatory filing that requires manual intervention because two supposedly compatible systems interpret the same data differently. 

These are symptoms of an approach to vendor management that treats each technology decision as independent rather than part of an operational ecosystem. 

Our research found that vendor fragmentation affects 56% of asset managers' product distribution capabilities. Beyond an IT problem, it's a business constraint that prevents firms from responding to market opportunities as efficiently as they could. 

What asset managers actually want 

When we asked senior asset managers about their vendor selection priorities, the responses revealed that a thinking has shifted in the last year:  

• Breadth of solutions (57%) topped the list. Firms may not want to buy everything from one provider, but they're tired of the integration headaches that come with multiple best-of-breed point solutions. 
• API integration capabilities (53%) ranked almost as highly, reflecting the reality that no single vendor can do everything, so seamless connectivity has become essential. 
• Ongoing service quality (47%) mattered more than initial functionality, suggesting firms have learned that vendor relationships are long-term partnerships rather than one-time purchases. 

Interestingly, regulatory roadmap alignment ranked lowest at just 7%. It’s clear that asset managers expect any serious vendor to handle regulatory requirements competently. 

The “integration tax” 

Asset managers may underestimate the true cost of managing multiple vendor relationships. Beyond licensing fees, there's what could be called an "integration tax" or hidden expense of making disparate systems work together. 

Data inconsistencies between platforms require manual reconciliation. System updates from one vendor can break connections with others. Simple changes that should be straightforward become complex projects when they involve multiple suppliers. 

The firms moving away from vendor sprawl aren't necessarily choosing single suppliers for everything. But they are being more deliberate about which integrations are worth the ongoing complexity and which partnerships genuinely add value versus creating operational friction. 

Practical strategies for viable tech partnerships 

The most successful asset managers approach vendor relationships with three practical principles: 

• Consolidation where it makes sense. Rather than pursuing best-of-breed for every function, they identify areas where integrated solutions reduce operational complexity without compromising essential capabilities. 
• Integration depth over breadth. They prioritise vendors whose systems connect seamlessly with their core infrastructure rather than those offering the most features in isolation. 
• Operational alignment. They choose partners whose service models match their internal capabilities and growth plans rather than simply offering the lowest cost or most impressive demonstrations. 

Firms are moving beyond traditional procurement criteria to evaluate vendors on factors that actually matter for long-term operational success. 

They're asking different questions: How quickly can this provider adapt to regulatory changes across our target markets? What happens to integration complexity if we add new distribution channels? Can their systems handle our growth projections without requiring fundamental changes? 

The strategic benefit of a healthy vendor ecosystem  

This mindset shift from procurement to partnership is one of the clearest signals of operational maturity we’ve seen in this year’s research. The firms gaining ground aren’t those with the most vendors or the flashiest tools, but they’re the ones who ask better questions, build smarter ecosystems and think long-term about integration and scalability.  

Our Asset Managers Report 2025 explores exactly how they’re doing it: what’s working, what’s not and where the next wave of efficiency gains will come from. 

Download the full report below to benchmark your own vendor strategy and see where the market is headed.