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A nice catch from ValueWalk:Global assets under management are expected to rise from $64 trillion to $102 trillion by 2020, growing at a 6% compounded annual rate, a new study predicts. Nearly half of those assets will reside in North America.
The report, “Asset Management 2020: A brave new world,” published by Price Waterhouse Coopers (PwC), notes six disruptive “game changers” and trends that will result, offering asset managers new opportunity.
“The industry stands on the precipice of a number of fundamental shifts and the potential for significant volumes of assets, there is more responsibility on firms,” noted Barry Benjamin, global asset management leader, PwC. “Strong branding and investor trust in 2020 will only be achieved by those firms that place a premium on transparency, a concrete value proposition to customers, and a firm commitment to avoiding practices that could prompt concerns among investors, regulators and policymakers.”
PwC: The “Game changers”
Among the game changers:
- Shifting demographics will propel asset management to emerge “from the shadows to the forefront,” the report noted. This increased visibility will require asset managers to make “new investments in data, technology and talent may be needed to respond to heightened regulatory and competitive pressures. These expenses could continue to burden profits, which, according to industry analysis, are still 15-20 percent below their pre-crisis levels.”
- New distribution regions will be redrawn into four regional fund distribution blocks, according to the report: North Asia, South Asia, Latin America and Europe. These regional blocks are expected to develop regulatory and trade linkages with each other, “reshaping the way that asset managers view distribution channels. North American asset managers may need to evaluate their strategy to consider the impact of these linkages.”
- Fee structures may change to align more with investor interests and promote enhanced transparency. “In the US, asset managers are facing the unique confluence of imminent mass retirement and growing healthcare costs which is likely to shift investment strategy towards longer term wealth accumulation with more emphasis on fixed income and income generating assets.”...
