We set out ten predictions for the themes that would impact the asset management industry in 2017.
Starting with this exercise in 2016, we didn't get all of our predictions right, nor did we foresee the major political shocks of the year. However, we reckon that seven out of ten ideas were on target, and we think the other three ideas may still come to fruition eventually. So, encouraged by feedback from our readers, we came up with the following ten ideas for 2017.
- Evolving market conditions give active managers a fighting chance.
- Institutional DB space becomes even less attractive.
- Value for Money becomes the new industry quality standard.
- The year 2017 will see changing fee structures to create stronger alignment of interest.
- Intensifying pressure on profitability will force AMs to adopt more aggressive cost management programs.
- Traditional metrics of successful M&A will have to be reconsidered.
- Digital disruption comes to portfolio management with implications for organizational design, resourcing levels and talent.
- Investors increasingly look toward “operational alpha” for market outperformance.
- Further challenges for the integrated asset and wealth businesses are to come.
- Greater focus will be on selling value proposition internally, not just externally.
Last, but clearly not least: Prepare for the unexpected. Even if our predictions are broadly correct, it is likely that important details will turn out differently. One way to prepare, therefore, is to work with scenario planning, and identify “no regrets” actions.
