Environment

• The industry is turning out enviable performance year after year
• Overall profit margins have remained remarkably stable (around 30%?)
• Customer needs are changing fundamentally
• Looming retirement of demographic profile in some economies drive retail market
• Worsening pension deficits and new approach to valuation compel institutional side
• Top ten players in the market manage closer to $1 trillion in assets
• The industry is now extraordinarily healthy
• The profit gap between winners and losers continue to widen
• Overall a more crowded and complicated industry landscape

Trends

• Move from accumulation to income and risk management
• Move from relative performance to outcome orientation
• Separation of alpha and beta
• Pension restructuring
• Institutionalization of retail sales
• Increasing role of marketing and client service
• Convergence and evolution of alternatives
• Changing sources of growth in retail and international

Impact

• Unprecedented  demographic shift will lead to two thirds of all investable assets controlled by households in the income / protection / preservation mode from the earlier accumulation mode
• Retirement wave is fuelling demand for investment products that mitigate risk
• Outcome oriented funds are growing much faster than the mutual fund industry
• Separation of alpha and beta is taking hold among institutional investors
• Pension fund sponsors demand new products innovation
• Pension fund sponsors seek more sophisticated solutions from asset managers

Forecast

• In US, the IRA market will be the primary market for growth
• Open architecture will take hold in European markets
• Dominant business model could be multi-boutique
• Promising growth in Asian Asset Management Markets
• China and India will dominate the spotlight
• Japan will present greatest near term growth opportunity
• Bank channel will be the most promising source of growth in all markets
• A shakeout in the alternatives industry
• Significantly different earning profile for traditional asset managers
• Large scale, mergers and acquisitions?

Agenda

• Seize the retirement opportunity
• Reengineer investment management process
• Refocus wholesaling approach
• Develop new businesses to catch the next wave of growth
• Drive scale to generate operating leverage

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