Just over 44% of asset managers worldwide reported net outflows last year, while positive net flows into passive strategies globally doubled to reach 72%, new research indicates.
The Performance Intelligence Asset Management Benchmarking Survey, published by benchmarking firm McLagan, surveyed members of the US and European Asset Management Institutes, and the executive teams of 100 leading asset management firms.
The survey found that despite the rise of passive vehicles and rising outflows, and aggregate fees declining to an average 50.1 basis points from 51.4 in 2014, industry revenue was barely dented, falling to around $344 billion (€307.3 billion) from $346 billion. Operating margins also fell slightly, to an estimated 32%, from 34%. Nonetheless, global assets under management rose to an estimated $69 trillion in 2015, from $68 trillion in 2014.
Jeffrey Levi, senior manager at Deloitte, said the findings were a stark reminder that traditional active managers must adapt their “outdated” business models.
"Fees are under increasing scrutiny, and regulatory pressures are on the rise. This shifting marketplace will in turn drive greater convergence in the industry across wealth management, asset management, insurance and financial technology,” he said.
Fred Bleakley, director of the US Asset Management Institute, said the industry was now undergoing an era of disruption and consolidation similar to what Wall Street firms underwent in the 1980s.
"Surviving asset management firms will be leaders in specialty active management, smart beta passive, and multi-asset class solutions,” he said.
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