Money managers' assets slipped 4% in 2009

While the market recovered in 2009, most asset managers did not, according to a report Tuesday from The Boston Consulting Group.
JUL 20, 2010
While the market recovered in 2009, most asset managers did not, according to a report Tuesday from The Boston Consulting Group. Average assets at money management firms slid 4%, the second straight year with a decline, BCG reported. Net revenue fell by 11%, and operating margins dropped 19%. This year, however, the picture is expected to improve, with average profit margins anticipated to increase to 35%, up from 31% in 2009, BCG said. Four years ago, average profit margins reached a peak of 40% of net revenue, but it will be a while before firms are able to regain such levels, according to Kai Kramer, partner and leader of BCG’s global asset management practice. “A higher share of lower-margin products, pressure on prices and structural cost increases will make it difficult to regain peak historical profitability levels in the future,” Mr. Kramer said in a press release. The report showed a wide gap between winners and losers, BCG noted, with less than 20% of asset managers able to increase their profitability. The firms that were able to boost profitability did so both through higher revenue and asset inflows. Firms with the largest inflows also had the best sales but were smaller, with less than a quarter of overall assets under management. More than a third (37%) of firms saw asset outflows last year, BCG said. Still, when it comes to the big picture, market performance boosted assets under management in 2009. Worldwide, assets increased 12% in 2009 to $52.6 trillion, following a plunge of 17% in 2008. Asia and Latin America posted the strongest growth in assets at 25% and 22%, respectively, to $2.5 trillion and $800 billion, while in North America, assets under management increased 11% to $26.1 trillion. Asset inflows accounted for just 1% of the increase, BCG said. BCG based its analysis on studying asset management markets and managers in 34 countries.

Latest News

Treasury hits BofA with $1.2B fine over money laundering violations
Treasury hits BofA with $1.2B fine over money laundering violations

“Today’s actions send a clear message that even the biggest financial institutions are not above the law,” said Treasury Secretary Scott Bessent.

The hidden cost of growing a firm without intention
The hidden cost of growing a firm without intention

To build a truly self-sustaining practice, enterprising advisors have to start with a vision of what they want to be – and accept the realities that come with building toward it.

Waverly, Apella buy $412M in RIA assets across Oregon, Northeast
Waverly, Apella buy $412M in RIA assets across Oregon, Northeast

Serial acquirers add a 35-year-old Oregon wealth manager and a New York practice focused on women navigating life transitions.

&Partners taps two UBS leaders to run its private wealth business
&Partners taps two UBS leaders to run its private wealth business

Mara Glassel and Julie Fox will co-lead the fast-growing hybrid RIA’s ultra-high-net-worth and private wealth businesses.

Citi sees Q3 profit jump as wealth unit books record $38B in net new assets
Citi sees Q3 profit jump as wealth unit books record $38B in net new assets

The banking giant's wealth arm extends its revenue streak as it pushes to exit consent orders weighing on growth since 2020.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor