When you think asset management, you may conjure up thoughts of Blackrock, Fidelity or Pimco. Your kids, on the other hand, are likely to consider other names: Apple, Google and maybe even Wal-Mart.
A new report from KPMG suggests that the asset management industry will be flipped on its head over the next decade as technology and younger-minded investors grow in prominence. Roughly half of all asset managers will be out of business come 2030, according to the report.
"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.
Those that don’t embrace online platforms and even social media will get swallowed up by larger emerging competitors, or they will simply become obsolete and die off, the authors note.
Younger, more diverse clients, particularly those in developing nations, will gravitate toward more familiar names, namely those with a technology focus. "We could see the Apples, Googles or large retailers of the world becoming the next big powerhouses in investment management,” Brown said.
A sea change of some sort is inevitable, but it’s still a bit of a scary thought. On the plus side, Google knows everything about us anyway. And wouldn’t it be great if Wal-Mart could package a high-yield bond with a 12-pack of paper towels and some toys for the kids?
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Quote of the Day: I don't know the key to success, but the key to failure is trying to please everybody. – Bill Cosby