Asset Management Industry May Shrink 50% By 2030: KPMG

Nearly half of the firms in the global asset management industry will not exist by 2030 as the fund companies struggle to keep up with the new technology, demographic shifts and changing social habits, according to a KPMG report.

KPMG is one of the largest professional services companies in the world and advises fund firms on a wide range of issues – from technology to staffing, taxes and regulation.

According to the report – Investing in the Future – many firms are outdated and at danger of being swallowed up by peers and new entrants, including tech companies and retailers.

"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," said Tom Brown, global head of investment management at KPMG.

The shrinkage in the asset management industry will come amid a greater focus on saving in the developed world and a growing ability to invest on the part of the middle classes in China, Mexico, India, Nigeria and other developing economies.

"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 Brown.

The study said that brands, such as Apple, Google or Amazon, which resonate strongly with young people, could find themselves becoming the next big powerhouses in the investment management world.

The growing relevance of online communities and social networks is changing attitudes and behaviours, too.
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