Financial Times Covers New Oliver Wyman And Morgan Stanley Wholesale Banking Report

The Financial Times covered Oliver Wyman and Morgan Stanley annual wholesale banking report – Wholesale Banks And Asset Managers – Winning Under Pressure -- in two separate stories.  The stories focus on how the asset management industry is at a crossroads with continued fee pressure and increasing costs.

To read the first story, “Asset Managers Will Rue Failure to Tackle Costs,” please click here.

Christian Edelmann, Oliver Wyman’s head of head of Corporate & Institutional Banking, is quoted in the second story titled “Vanguard’s Campaign to Drive Down Fees Runs out of Road.”

The average fee reduction for passive funds over the past two years was 16 percent and for active funds it was 2 percent — but the majority of those cuts were made in 2016, according to Oliver Wyman, the consultancy. At the same time, fund manager costs rose 8 per cent in 2017 compared with a 3 per cent annual average over the previous five years. Christian Edelmann, head of the asset management practice at Oliver Wyman, said fund companies were spending money on big long-term projects. “Many fund managers have not managed to bring IT and operational costs down to the extent they should,” he said. He added that a significant part of the increased spending was down to rising pay at asset managers on the back of bonus payouts that had been triggered by strong market returns. Mr Edelmann said the pressure to cut fees had not been felt across the board, with underperforming funds feeling it much more acutely.