Originally published in Funds Europe, December 8, 2020
Staff productivity along with outsourcing and fee pressure rank highly in the concerns of asset management executives, along with the more predictable worries about the economy.
Research from the bank BBH also shows that firms are targeting data/IT and middle office to improve efficiencies.
BBH surveyed over 50 senior executives in asset management for its ‘C-suite asset manager survey’ and said the economy, outsourcing, and the future of work were among the top priorities.
The level of economic concern appeared to correlate with the size of firm. The economy was the main concern for 61% of executives, but it was higher (70%) at firms with less than $50 billion of assets under management (AUM).
Firms with more than $500 billion in AUM were more concerned with staff productivity and cybersecurity.
Some other chief findings were:
After the 61% of respondents who said the economy is their top concern, next came sales efforts/revenue retention (45%) and staff productivity (29%).
35% said they were evaluating new strategies such as ETfs and alternatives to combat fee compression, economic pressure, and to boost performance. Some will boost performance with securities lending, foreign exchange and operational improvements.
52% of asset managers are planning to reduce the expense ratios or fees in the next 12 months to respond to competitive pressures.
Managers are targeting data/IT and the middle office for efficiency improvements. 57% of asset managers are looking to improve their data abilities and 38% identified the middle office as an area to drive efficiency.
30% of global asset managers are more likely to consider outsourcing operational functions than a year ago.
Chris Remondi, global head of relationship management and capital markets at BBH, said: “With this survey, we embarked on a mission: interview asset management leaders — CEOs, COOs, and senior executives — to see how managers are coping and what is the future of our industry. The results of our conversations demonstrate both the challenges and the resilience of our industry.”