Asset management continues to be the most profitable business in the world, according to figures from the Boston Consulting Group (BCG). However, new net assets remained low, pointing to more growth needed going forward.
The research surveyed top managers in mutual fund flows, which increased in the US but flattened in Europe.
The report says the global value of professionally managed assets grew to $74tn (£47tn) in 2014 and profits rose to $102bn (£65bn), matching pre crisis levels. The asset management industry’s net revenue growth faltered in 2014, down from 9 per cent in 2013 to 7 per cent in 2014, due to fee pressure, according to the report.
The retail sector saw increasing transparency driven by regulation push fees lower. Another survey conducted by State Street also indicated that global asset managers view regulatory change as the biggest risk for their business.
In the survey of 400 managers in Asia, Europe and North America, 32 per cent said they anticipated regulatory risk to increase, followed by 21 per cent who cited market risk. Roughly 59 per cent said they were planning to raise their investment in regulatory compliance. Within Europe, the Middle East and Africa, the figure was 56 per cent.
“The key is to make regulatory compliance a part of business as usual – rather than a constant fire drill,” said John Bolton, head of thought leadership, EMEA at State Street.
“But nearly two-thirds of respondents still think heightened risk and compliance demands threaten to divert resources from more critical business areas,” he added.
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