While the industry has seen material growth in AUM in recent decades, supported by rising financial markets, global macroeconomic growth and an increasing population of savers, it is also having to contend with significant structural shifts. These structural shifts include:

a lower return environment for investments due to interest rate dynamics;
shifts to more passive investment products in traditional public markets and to private markets asset classes that can offer diversification and potentially higher returns;
a reorientation from institutional to individual investors, as individuals have to take more responsibility for their financial future;
a continuing drive by investors and regulators for lower fees and to ensure “value for money”;
increasing regulation and the cost thereof;
an increasing use of technology and a drive for digitalisation, particularly in consumer-facing segments;
a greater focus on environmental, social and governance aspects and the nature of underlying investments; and
an ongoing and increasing polarisation of the industry, including a consolidation among larger and medium-sized asset managers, driven by economies of scale, and the growth of smaller boutiques in specialist asset classes.

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