Navigating the Perfect Storm: How Asset Managers Can Thrive Through Uncertainty
Asset management firms face a trifecta of challenges that combine to create a perfect storm of existential threats. Our recent Asset Manager Report revealed the key challenges that weigh on the minds of senior asset managers in the UK: regulatory pressures, cost pressures and technological disruption.
Let's explore how these challenges compound - and what successful firms are doing to not just survive, but thrive through this period of uncertainty.
The Compounding Effect
Regulatory Pressures: With 41% of asset managers citing this as their primary concern, it's clear that the increasing complexity and volume of regulations have taken their toll. From SDR to PRIIPs, keeping up with and implementing new rules is both time-consuming and costly.
Margin Squeeze: 39% of respondents highlighted pressure on costs and margins as a significant threat. As passive investing grows and fee structures come under scrutiny, many firms are seeing their profits eroded.
Technological Disruption: With Asset Under Management in decline thanks to the rise of unmanaged funds and ETFs, 37% of asset managers view technological advancements, including AI, as a potential threat to their business models.
These challenges don't exist in isolation. For instance, implementing new technologies to stay competitive often requires significant investment, which tightens margins even further. Meanwhile, new regulations often necessitate technological upgrades, creating a cycle of increased costs and complexity.
At FE fundinfo, in addition to providing a golden source of truth in the industry, we pride ourselves on offering the comprehensive platform that encompasses task-specific tools and best-in-industry data to facilitate faster market access through preferred channels, reducing costs and mitigating regulatory risks.
We’ve been a trusted partner in the industry for nearly two decades, with our end-to-end solution and the data and industry knowledge to help asset managers make informed decisions with confidence.
Strategies for Success
- Don’t go it alone: Forward-thinking firms are leveraging technology and automation to streamline their compliance processes. Doing so reduces costs in the long run while minimizing human error (and the delays that come with it).
- Leverage your strengths: Many successful asset management firms are streamlining their operations, using end-to-end solutions like FE fundinfo’s complete platform to automate routine tasks and reallocate human resources to high-value activities. The bigger they are, the more they have to gain here.
- Pioneer your product offerings: To combat margin pressure, leading firms are using data to assess demand and develop value-added products that net higher fees.
When the only constant in our industry is change, it helps to have the practices and partners that see you through times of uncertainty. Working in alignment with the data, connectivity, and expertise provided by FE fundinfo, firms are positioned to view their challenges holistically and adopt a proactive stance that turns threats into opportunities.