Amazon could be in prime place to shake up asset management industry

Amazon.com Inc. is well positioned to shake up the asset management industry, according to a new strategy report from Sanford C. Bernstein & Co.

The Seattle-based company’s broad customer base and online platform would give it an edge among big tech companies in asset management, most likely as “an arms-length distributor of funds” rather than as a “super-active manager,” Bernstein analysts including Inigo Fraser-Jenkins wrote in a research note Tuesday. They cautioned this is just speculation as there’s no sign that Amazon is pursuing asset management at this time. The company didn’t reply to an emailed request for comment.

Wall Street’s infatuation with Amazon has spread across the market with speculation that the company may dive into sectors like insurance, mortgages or even medical devices. Already this year, Amazon has been a disruptive force for grocery stores, home security and prescription drug distributors. The opportunity is there for fund management with demand for lower-cost financial advice, Bernstein said.

To be sure, the potential foray into the sector wouldn’t come without a number of risks. Bernstein thinks the regulatory hoops would be surmountable but the risk to Amazon’s reputation if investors lost money would be a bigger challenge to overcome.