Wealth managers have benefited from
distributing and developing investment products allowing them to
win business from asset managers, new research has found.
Boston Consulting Group’s (BCG) 2012 Global
Asset Management report, Capturing Growth in Adverse
Times, identified five other key challenges in the asset
“U.S. wealth managers and advisors have
established a very strong position in the managed program-market,”
according to the report. “In the U.S, they package and distribute
the majority of these assets, enhancing their own power in the
value chain and acting as gatekeepers to asset managers.”
Two-speed global AM climate
Information gathered from the report, showed
that despite the industry’s recent recovery in growth and
profitability from the economic crisis, consistent growth has come
to a halt.
BCG found that asset managers had failed to
attract substantial flows of net new assets since the start of the
economic downturn in 2008.
It also found that asset managers in
developing markets experienced annual growth of 7% since 2007,
while developed markets declined by 1% showing that mangers are
still confined to a two-speed world.
Despite the move from traditional offerings to
investor preferences continuing, the report found that, the gap
between those adapting to this shift and those that have been
unresponsive, has widened. This has resulted in a loss of
AM industry at risk
BCG warned that these trends could leave the
industry at risk if they are to continue.
The consultancy suggest managers
place a strong focus on understanding and addressing investors
needs by constantly innovating, building capabilities, and bringing
adapted solutions to the market.
It also puts forward the following keys to
overcoming lack of growth and profitability:
Self-assessment – providers
should look at how best to position themselves to utilize growth
Emerging winners – follow the
lead of managers that have strong capabilities and offerings
focused on segment-product-geography combinations
Strategic choices – it is
critical for managers to understand the impact that strategic
choices can have on a company’s business model and capabilities
Capturing unrealised growth
potential – regardless of whether there is a need to
change strategic direction, all managers should identify and pursue
unrealised potential for growth