A report published in May by the Boston Consulting Group brings to mind a quote from Jack Welch, former CEO of General Electric - “Change before you have to.” No doubt the authors of the report would be inclined to agree with this sentiment, although in the case of a chaotic economic climate, the ‘have to’ has already arrived. As a result, they point towards the undeniable necessity of transformation should asset managers want to survive the pressures of rapidly rising interest rates and central banks’ policies of combating inflation through the slowing of growth.

This transformation, as suggested in BCG’s 21st annual global asset management report, can be achieved through the Three Ps; profitability, private markets and personalisation. 

Firstly, profitability can be enhanced through a focus on multiple initiatives to optimise costs, rather than falling into the trap of 'reactionary' cost-cutting measures. 

Next, in regards to the plethora of opportunities provided under the umbrella of privates markets, of note are the benefits to be found in high-growth alternative investments. The blooming of alternatives can be seen in its accounting of half of the asset management industry’s global revenues in 2022, representing $20 trillion of global AuM. The momentum is expected to continue.

Lastly, personalisation. The majority of consumers now consider personalisation a basic expectation. An ever-growing offering of technologies can be employed by asset managers to boost personalised sales and marketing across the client experience. 

The markets are always full of uncertainties and the continuing advancement of technology will serve to multiply this. As suggested in BCG’s report, it is the leaders in asset management who take action now who will be the ones who are most likely to thrive in the years ahead.