What Your Fund Management Job Will Look Like in a Decade

In the report’s most bearish case, accelerating inflation leads to central banks tightening policy, driving down asset prices and putting active managers under even more cost pressure. Even under Oliver Wyman’s bull case, with asset prices benefiting from growing economies, passive strategies will underperform and fees will be under pressure.

As for so many other industries, salvation may lie in better technology. While the use of data mining and artificial intelligence in investment selection grabs the headlines, those techniques will become increasingly important as tools for winning and retaining clients.

Asset managers that analyze their customer relationship information in conjunction with the asset allocation preferences of both existing and potential customers will gain an advantage. The bigger the firm, the more data it will have available and the more resources it can throw at improving its analytic capabilities.

That will change the nature of the workforce. Firstly, it will get smaller. Of those workers who do manage to keep their jobs, up to 40 percent will need “fundamental retraining” on the use of analytical tools. But there should be a reward: the share of total compensation going to technology and data management employees will grow fourfold in the next five to 10 years, the study said.

The study estimates that the total number of data scientists across 160 major asset management firms is about 340, up from just 45 at the start of the decade. Those same firms are seeking an additional 275 data scientists this year.

So, forget about honing your stock-picking skills. If you want to get ahead in the fund management industry, focus instead on your data-mining abilities.

Mark Gilbert is a Bloomberg Gadfly columnist covering asset management. He previously was a Bloomberg View columnist, and prior to that the London bureau chief for Bloomberg News. He is the author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”