UK - The fund management industry enjoyed steady profits last year but there are challenges ahead, a survey shows.
The IBM Investment Management survey found profits within the industry held at 24% last year, consolidating gains made during 2002.
Revenues strengthened to remain above 24.6 basis points and costs stayed in line with 2002 at 18.7 basis points.
IBM Business Consulting Services partner Graham Wright said: “The industry has coped well with the short-term pressures it has experienced over the past couple of years.
“But now, as the report indicates, confidence is re-emerging, fund management businesses are starting to invest in their own longer-term futures again.”
And Wright said there were risks on the horizon.
“We’re seeing significant developments in business profiles towards a spectrum of specialist products and services with risk profiles and fees to match.
“This will put fund managers’ revenues under pressure and expose them to greater volatility.”
He said the industry faced a twofold challenge. It needed to introduce genuine economies of scale to services at low cost and flexibility to cope with radically higher proportions of revenue at risk.
Labour Party plans to renationalise core industries and require the largest listed companies to hand 10% of shares to employees would be a "double whammy" for pensions, business leaders have warned.
A handful of industry heavyweights have begun trialling a so-called 'mid-life MOT', with positive initial results reported by all those involved.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".