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The Actuary The magazine of the Institute & Faculty of Actuaries

Global megatrends create perfect storm for asset managers 

Asset managers have been told to prepare for “massive change and disruption” amid growing technological, environmental, demographic and social pressures.

Changes will be felt in every corner of the organisation ©iStock
Changes will be felt in every corner of the organisation ©iStock

The warning from Willis Towers Watson (WLTW) comes after it found that 405 of the world’s 500 largest asset managers recorded rising interest in sustainable investment over 2017.

Three-quarters deployed more resources to deal with technology and big data, nearly two in three increased product offerings, and a similar number reported a rise in regulation.

Head of research at WLTW’s Thinking Ahead Institute, Bob Collie, said these changes could test businesses’ character and culture just as much as they do investment skills.

“There is a confluence of global trends that are combining to create a period of potentially massive disruption for the industry,” he continued. “The implications go well beyond the investment process. 

“These changes affect business models, people models, operating models and distribution models as well – they will be felt in every corner of the organisation.”

The research also shows that the world’s 500 largest fund managers saw their total assets under management increase by 15.6% to $93.8trn (£74trn) over 2017.

The rate of growth was the greatest observed since 2009, with the 20 largest managers accounting for 43% of the assets – the highest level recorded this century.

BlackRock retained its position as the world’s largest manager for a ninth consecutive year, with The Vanguard Group, State Street Global, Fidelity Investments and Allianz Group completing the top five.

North America-based managers represented the majority of assets by the end of 2017 on 58.1%, while Europe accounted for 31.8%, Japan 4.8%, and the rest of the world 5.2%.

“On the surface, the numbers might appear to tell a story of steady growth and of stability,” Collie said. “The names at the top of the ranking are familiar names.

“But when you look at broader developments within and beyond the industry, there are signs that the industry is facing significant change.”

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