How to revive the asset management industry

How to revive the asset management industry

Global capitalism, sadly, has little time for patriotism: pragmatism is more the order of the day. 

But there is nothing wrong with a little bit of both, and it is never easy to see good, British-born business being taken abroad – not when the jobs hot foot it away, too. While it is the household names that hog the headlines, the UK’s technology sector is another case in point.

We can talk about Silicon Roundabout all we like, but many of our real success stories are snapped up by US firms before they are barely fledglings.

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In the face of all this, the UK asset management sector has to be seen as a great British success – if not a flawless one. It is an industry that by size is second only to the US globally. Managing £7trn total assets and employing more than 37,000 people, the UK asset management industry is a valuable and vital strength to the UK economy. 

But there’s no time for complacency, and it is interesting to see that the Financial Conduct Authority (FCA) recently launched a new asset management authorisation hub to make it easier for firms to understand how the organisation works, make a complete submission, and generally facilitate new entrants to the market. 

In true entrepreneurial-supporting style, the hub seeks “to provide end-to-end support for firms moving through the start-up cycle”.

This initiative is hugely welcome – we absolutely should be encouraging innovation and nurturing young talent in a supportive regulatory framework. Seven Investment Management (7IM) recently marked its 15-year anniversary – could we have benefited from such a hub when we were starting out? 

While I hesitate to say it was “different for us”, I’d wager that it was: when we were setting up 7IM, Tom Sheridan, my chief executive, and myself already had 40 years’ financial services experience between us, and that is not counting the tenure of the other five co-founders. 

But the more we can do to remove the barriers to innovation, help and encourage potential new entrants to roll up their sleeves, and yes, smash that glass ceiling, the better.

Do I wish we could have set up 7IM sooner? Absolutely, but in our case I am not sure we could have done. 7IM was set up to challenge all the things we did not like about the asset management sector. And that came out of pure disenchantment with the industry we had worked in for so long.

Laudable history

History and legacy can be a source of great strength and the UK’s asset management industry has exactly this. From pen prints of 18th century stockbrokers in the London coffee houses of Jonathan’s and the like, through to the bragging days of the Empire, this industry has grown and prospered, and especially on the international trading centre that London had become.