Due to seismic shifts in client demographics, technology and changing social values and behaviors, half of the firms in the global asset management industry will be vanished by 2030, reveals a report by KPMG.
Titled, "Investing in the Future", the report forecasts that that by 2030 the client base of a typical asset manager will be completely different from today’s, as generation X approaches retirement, generation Y matures and the middle class expands in emerging markets.
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Indicating the radical transformation over the next 15 years, the report warns that current business models will not be fit for purpose.
KPMG International investment management global head Tom Brown said, "We are on the verge of the biggest shake-up the industry has experienced; and the message to asset managers is clear – adapt to change or your business won’t survive."
"The two biggest issues that need to be addressed are the changing client base and technology, and asset managers need to get to work on these areas now."
"It is no longer just about attracting the clients who are armed with cash and ready to invest.
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By GlobalData"The successful asset managers of tomorrow must focus on building cradle-to-grave relationships with a dramatically different and more diverse client base from today, which includes much younger investors," Brown added.
KPMG, which advises fund firms on various issues from technology to staffing, taxes and regulation, noted that many companies will become obsolete and at danger of being swallowed up by peers and new entrants including technology companies and retailers.
The report further highlights that growing middle class in China, Mexico, India, Nigeria and other developing economies over the next 15 years will offer significant inflow of money and will shape the future wealth management industry.
Since, the younger and more diverse client base would require new platforms and a greater focus in online and social media networks, it will give a opportunity for new, tech-savvy companies to enter the industry, according to the report.
