Asset management, apart from a very brief spell in the early 2000s during the ‘star fund manager’ era, has never been sexy.
Now asset management is the new black: everyone wants in. Goldman Sachs, Credit Suisse, Deutsche Bank, JPMorgan and Wells Fargo are all building their asset management divisions in a bid to combat declining revenues in investment banking, retail banking and/or a slowdown in the global economy. Good markets or bad, money has to be managed.
Trouble is, there are plenty of very large and good asset managers in existence already. There is no gap for the banks to fill, so they will have to go head-to-head with those with greater expertise, experience and scale.
Holes
On the flip side, large asset managers such as Fidelity, BlackRock, Vanguard, Invesco, Schroders and Investec have been cleverly encroaching on the space of banks – and they have found plenty of gaping holes to fill.
One of those gaps has been the need among clients and bankers for automated advice and asset allocation. Banks have been slow to invest in these services.
They have also been entirely absent on the acquisition front. Asset managers by contrast have been buying or setting up robo-advisory businesses, or automated businesses that serve end-advisers. BlackRock bought FutureAdvisor, Schroders acquired Nutmeg. Invesco bought Jemstep in January. That has put them on the radar of both affluent clients and the middlemen who serve them. Banks beware.