Global asset management industry to expand through 2030, profitability remains a challenge: Morgan Stanley
New Delhi, October 25
The global asset management industry is expected to witness continued growth through 2030, however, declining management fees could put pressure on revenues, with private markets and artificial intelligence emerging as key drivers of profitability, according to a report by Morgan Stanley.
The report noted that global asset and wealth management industries entered 2026 at record levels, with assets under management (AUM) reaching USD 159 trillion, up 15 per cent year-on-year.
However, it flagged that strong market performance and currency movements, rather than fresh investment inflows, accounted for over 80 per cent of growth in assets managed by asset managers and nearly two-thirds of growth in wealth managers' assets.
"This environment has meant that being stuck in the pack has been a fine place to hide. But that shouldn't be confused with being in a good place."
According to Morgan Stanley, the most successful asset and wealth managers will be those that can identify major industry trends and adopt the right strategies and business models to stay ahead of competitors.
Morgan Stanley estimated that industry revenues would grow by 7 per cent annually, compared with 9 per cent growth in assets under management (AUM), as average management fees decline from around 35 to 32 basis points.
It also highlighted the increasing concentration of revenues, stating that "Private markets will generate 39% of industry revenues by 2030 on just 15% of AUM."
At the same time, it noted customised investment solutions, once mainly available to institutional and ultra-high-net-worth investors, are now becoming accessible to a wider range of investors. In the US, assets managed through externally managed customised investment models have more than tripled since 2023 and could reach USD 1.6 trillion by 2030, it said.
Amid all this, it highlighted artificial intelligence (AI) as a major force reshaping the asset management industry, changing how firms operate and organise their businesses.
It noted that more than half of firms have already adopted AI in at least one part of their investment processes, although limited use has yet to deliver significant financial benefits.
Also, firms adopting AI across their operations, rather than using it for isolated tasks, could improve their cost-to-income ratios by up to 15 percentage points by 2030, as per the report.
Overall, "The asset management industry will be substantially larger in 2030 without necessarily being more profitable, and the difference between leaders and the rest will come from where and how they compete rather than how much they gather."
— ANI
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