Global asset managers could see revenues slump as much as 30% in just two years if pressure on fees and returns continues unabated, according to a report by Morgan Stanley and Oliver Wyman.
Bloomberg News reports that if fees fall another 10% by 2019 and money continues to shift to low-fee products, the bank’s base case scenario, total revenue for the industry would drop by just 3%, analysts including Betsy Graseck and Oliver Wyman partner Christian Edelmann said in the report. Even so, the risk from two possible bear case scenarios outweigh the potential upside.
“We think the downside risks are higher,” the authors wrote in the report. If monetary policy failed to boost the economy or if an initial period of asset growth gave way to a collapse in prices then revenues would be expected to fall by about 30%, they said.
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