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Asset management firms 'may alter business models'

Companies operating in the asset management industry may need to make changes to their current business model following the financial crisis, it has been suggested.

According to PricewaterhouseCoopers, the economic downturn means many firms in the sector are continuing to find ways of cutting costs in the short term in order to ensure they are able to survive the recession.

"Firms may respond to market volatility by seeking new fee models that provide a more predictable revenue stream or aim to reduce costs in human resources," UK asset management leader for the financial services company Pars Purewal stated.

He added that asset management companies will also have to take into account an "increased tax burden", as governments will seek to recoup some of the public money spent on fiscal stimulation methods over the past 18 months.

The Bank of England governor Mervyn King recently suggested that the UK's banking crisis is beginning to ease, but warned that the country is still at risk of future shocks.