By Peter Hopkins via Iris.xyz
As the industry works to cope with new regulation, wades through an outpouring of new products, learns to satisfy investors’ shifting priorities and manages the active-passive debate, the viability of business units will be questioned, and at times radical measures will be taken.
It’s still early days for these three trends shaping the future of asset management, but their impacts will be felt far and wide:
1. Regulation Sparks More Consolidation
It’s no secret that regulation such as MiFID is front-of-mind for every financial institution. It’s dominating attention and spending allocations, and potentially diverting money away from investing in growth opportunities. Pressure on fees will accelerate the consolidation between players, so expect more mergers and acquisitions.
We’ve already begun to see it last year with Aberdeen and Standard Life, Janus and Henderson, and BNY Mellon’s blending of its three largest US asset management groups. Not only do these consolidation efforts create substantially larger asset pools, but they also foster cross-regional expertise in the case of Janus-Henderson for their respective specialties in the US and UK.
Be ready for more of the same this year as business costs rise, fees decrease, and profit margins tighten.
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