Consulting firm KPMG, which advises many firms in the asset management industry, has recently released a report on that industry’s long-term prospects, and it isn’t a pretty picture. In KPMG’s view, fully half of the firms in the global asset management industry will no longer exist in 10 to 15 years.
Asset Management’s Future –
Asset managers are those financial firms that are dedicated to managing their clients’ investments. Most often, asset management firms, including hedge funds, employ dedicated portfolio managers and analysts to prepare internal research reports. For many years their clients have been high net worth individuals, pensions, family and sovereign wealth funds, and corporations.
What KPMG is predicting is that younger people, as they age and accumulate wealth, will no longer look to today’s asset managers – including such famous names as Fidelity, Blackrock and Pimco – but will instead choose asset managers based on the asset manager’s online platforms and even social media, with (a) a technology focus and (b) names that are familiar to them.
So, as younger investors grow in numbers and prominence, and increasingly come from the new middle classes in China, India, Nigeria, Mexico and other developing economies, their asset managers of choice may be Apple, Google, Amazon – and even Wal-Mart. Yes, in a few years, municipal bonds and stock options may be located and purchased on Amazon’s master marketplace, or even in Wal-Mart’s Aisle 5.
“We are on the verge of the biggest shake-up the industry has experienced; and the message to asset managers is clear – Adapt to change or your business won’t survive . . . trusted brands that resonate and appeal to a more diverse client base, as well as the younger generation, may be able to build scale quickly,” said Tom Brown, KPMG’s Global Head of Investment Management.
Lessons for Us All –
Change, and an accelerating rate of change, are the only constants we can all reasonably expect. More and more people in my community have no independent family physician, but use the services of the 24-hour “urgent care” storefronts that have employee-physicians on-call 7/24. On an accelerating basis traditional institutions of higher education are offering online courses leading to degrees, and are thus unsure of whether their ivy-covered campuses and football stadiums will become, instead, senior housing and parking lots.
This blogsite, itself, is primarily focused on providing self-help assistance to those with employment issues in their lives, but unable to locate, unwilling to pay for, or poorly served by, the traditional legal profession.
Look to changing demographics. Observe evolving social norms. Get moving on social media. Search out scalability. Simply put, adapt or perish.
As one media mogul was recently quoted, “Either ride the wave or get crushed by it.” At work, in your career, and in your daily life, you are now on formal notice: try to observe, learn and adapt, whenever, wherever and to the greatest extent you possibly can. And as soon as you can, too, because that “wave” is a veritable tsunami, and fast-approaching.
Best “navigation” of work and career issues is what SkloverWorkingWisdom™ is all about.
© 2014 Alan L. Sklover. All Rights Reserved