BCG Asset Management Outlook – Fees, Tech, EMs, ESG and Fewer Winners

BCG in an Asset Management outlook for the next ten years identified a number of megatrends to be aware of and work with, none of them new but all of them looked at from an interesting angle.

Click here for the full report on their site.

Megatrends for the next decade:

  • Active vs passive vs alternatives... fees of course are the big issue, but also a better philosophical line of demarcation between what each firm is offering and how they go about it.
  • Technology and asset management… BCG expects “most firms to step up their digitization activities, leading to reimagined business models” – maybe, but given the great fees for decades and the old systems changing might take longer than expected, a competitive advantage for the first movers.
  • China overtaking Europe by AUM and gathering more flows than the US, along with other EMs stepping out of the shadows. Definitely true for wealth management, as for the stickiness for the retail and wholesale market away from churning products, we shall see.
  • An accelerating Winner-Takes-All phenomenon … absolutely true, as with music, sports, film, and many other industries. However, asset management by and large has continued to offer mid-size firms with a niche approach and perspective to carve out a good business model and growth.
  • ESG and “creating positive impact without undermining returns”. Agreed.

However these (and other) megatrends play out, definitely not a boring decade to come and continued opportunities for asset managers that serve their clients well.

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Written by

Daniel Enskat

Daniel has written over a dozen books on the global asset management industry and has lectured at universities around the world alongside speakers such as Secretary of State John Kerry, Dr. Mark Mobius, ex-Fed Chairman Alan Greenspan, Professor KC Chan and former Prime Minister Gerhard Schroeder.

He is widely sought after for presentations, discussions and his perspective on the global asset management industry, and in the last two decades has advised hundreds of investment management CEOs on strategy and global expansion.