Astroll through Cape Town International Airport or OR Tambo International will make one thing clear: asset management companies are making money… and a lot of it. But while groups like Coronation, Allan Gray, Nedgroup and Sanlam are making hay while the sun shines, their business models a re l i kely to come under increasing stress in the next decade.
In a new report generated by consulting giant PricewaterhouseCoopers (PwC) entitled Asset Management 2020, a brave new world, t he f i r m notes: “Amid unprecedented economic turmoil and regulatory change, most asset managers have afforded themselves little time to bring the future into focus. But the industry stands on the precipice of a number of fundamental shifts that will shape the future of the asset management industry.” Here is what the industry will look like in 2020 in the eyes of PwC. A FICTIONAL TRANSACTION It’s 11 March, 2020. As Wei boards her train in the suburbs of Beijing, heading for her office in the capital of the world’s biggest economy, she checks her mobile device.
She has been sent a message from international dating company eMatch’s sister site, eMatch Investments. The technology-based f i nancial adviser has analysed her f inancial strategy and automatically matched her dating style with the funds and fund companies most likely to meet her future needs.
One of t he recommended f unds is the SearchCo Asset Management (SAM) Global 80 Big Cities fund, so Wei clicks on her SAM app and plays a video t hat presents key i nformation about the fund. California-based SearchCo, an Internet search engine used by more than half of the world’s population, moved into the f unds i ndustry i n 2015, and by 2020 was registered in more than 40 countries as an investment adviser.
She c l i c k s t o s elec t t he f und and t he f und is immediately added to Wei’s eMatch Investments mobile account. The order and payment is handled by eCommerce.com, SAM’s service provider in China. eCommerce.com started out as an Internet commerce company in China until it decided to take advantage of its dominant 2004 North America position and applied its sophisticated payment processing systems to other industries, including asset management (AM). SearchCo bought a stake in eCommerce.com in 2017 to handle payment processing and transfer agency in the Greater China Region.
As a result of its new collaboration with SearchCo, eCommerce.com by 2020 is starting to process transactions in Europe and the US too. eCommerce. com sends Wei’s order to her chosen fund provider, based in Germany, and deals with all the necessary back-office processes. Asia Pacific Middle East & Africa