Asset managers prepared for industry challenges
15 November 2016 Boston
Image: Shutterstock
Regulation, client demands and cost pressures are posing a challenge for asset managers, but they’re confident in their ability to manage it, according to a survey by Osney Media and BackBay Communications due to be released at TSAM Boston tomorrow.
In the survey, 64.5 percent said they perceive regulation as a driver of change in the industry. This was followed by pressure on margins and cost, named as a driver by 48.4 percent, and the increase of passive investing, named by 38.7 percent.
More than a quarter, 27.4 percent, said that meeting client demands will be a key driver of change over the next five years.
Regulatory change was also the most-named driver of operational change within organisations, with 30 percent selecting this. A further 18.3 percent said the need to reduce costs will be the main driver of change, while increased competition and the need to enter new product areas were each considered the biggest drivers of change by 11.7 percent.
Consequently, technology and operations projects were high on the agenda for the next 12 months. More than half, 52.5 percent said they are planning on replacing legacy technology systems, 32.2 percent plan to introduce an online client reporting portal and 28.8 percent are looking to outsource some or all of their technology operations.
Generally, respondents said that are confident in their ability to meet the challenges facing both their own companies and the industry as a whole.
Regarding their own companies, 51.6 percent said they are fairly optimistic and 24.2 percent said they are very optimistic. Only 1.6 percent said they are very pessimistic, while 6.5 percent are fairly pessimistic and 16.1 percent are indifferent.
Results were similar for the industry outlook. While only 11.3 percent said they are very optimistic that the industry will be able to meet the challenges, 66.1 percent said they are fairly confident. While 9.7 percent said they are fairly pessimistic, the rest said they are indifferent.
Jonathan Wiser, director at Osney Media and organiser of TSAM Boston, said: “The asset management industry faces a number of challenges: growth in passive investment is putting traditional fee structures and margins under pressure, expectations and behaviour of clients are evolving and of course the regulatory environment continues to change.”
He added: “We are expecting to see an increase in organisational and technological change projects getting underway in the next 12 months as firms look to adapt to these shifting sands.”
The survey was conducted online between 19 September and 31 October, and was completed by 74 senior decision makers at investment management companies.
In the survey, 64.5 percent said they perceive regulation as a driver of change in the industry. This was followed by pressure on margins and cost, named as a driver by 48.4 percent, and the increase of passive investing, named by 38.7 percent.
More than a quarter, 27.4 percent, said that meeting client demands will be a key driver of change over the next five years.
Regulatory change was also the most-named driver of operational change within organisations, with 30 percent selecting this. A further 18.3 percent said the need to reduce costs will be the main driver of change, while increased competition and the need to enter new product areas were each considered the biggest drivers of change by 11.7 percent.
Consequently, technology and operations projects were high on the agenda for the next 12 months. More than half, 52.5 percent said they are planning on replacing legacy technology systems, 32.2 percent plan to introduce an online client reporting portal and 28.8 percent are looking to outsource some or all of their technology operations.
Generally, respondents said that are confident in their ability to meet the challenges facing both their own companies and the industry as a whole.
Regarding their own companies, 51.6 percent said they are fairly optimistic and 24.2 percent said they are very optimistic. Only 1.6 percent said they are very pessimistic, while 6.5 percent are fairly pessimistic and 16.1 percent are indifferent.
Results were similar for the industry outlook. While only 11.3 percent said they are very optimistic that the industry will be able to meet the challenges, 66.1 percent said they are fairly confident. While 9.7 percent said they are fairly pessimistic, the rest said they are indifferent.
Jonathan Wiser, director at Osney Media and organiser of TSAM Boston, said: “The asset management industry faces a number of challenges: growth in passive investment is putting traditional fee structures and margins under pressure, expectations and behaviour of clients are evolving and of course the regulatory environment continues to change.”
He added: “We are expecting to see an increase in organisational and technological change projects getting underway in the next 12 months as firms look to adapt to these shifting sands.”
The survey was conducted online between 19 September and 31 October, and was completed by 74 senior decision makers at investment management companies.
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