By 2030, the global asset management industry will radically transform because of seismic shifts in client demographics, technology and changing social values and behaviors, according to a new report from KPMG International.
The report says a typical asset manager’s client base will be completely different from today’s, as Gen X approaches retirement, Gen Y matures and the middle class in China, Mexico, India, Nigeria and other developing economies expands.
Clients will be much more diverse in terms of who they are, where they are located and what they need, want and expect from asset managers.
Current business models are not fit to address these changes, the report says.
“We are on the verge of the biggest shake-up the industry has experienced, and the message to asset managers is clear—adapt to change or your business won’t survive,” Tom Brown, global head of investment management at KPMG International, said in a statement.
“The two biggest issues that need to be addressed are the changing client base and technology, and asset managers need to get to work on these areas now.”
Brown said tomorrow’s successful asset managers must focus on building cradle-to-grave relationships with a dramatically different and more diverse client base in mind, including much younger investors.
“They must also be mindful that women are increasingly controlling a bigger share of family wealth,” he said.
Technology for Tomorrow
The report stresses the importance of technological investments, and suggests that firms are currently focusing on the wrong areas.
In 15 years, clients will have fundamentally different needs and expectations, according to the report.