The investment management industry is making risk control a higher priority, although fears of a rog...
The investment management industry is making risk control a higher priority, although fears of a rogue trader scenario have diminished, according to the PriceWaterhouseCoopers 2000 Investment Management Survey launched this week.
It found that 67% of asset managers now have a risk management director and that the biggest risks that firms perceive are performance risk, breach of client mandate, poor service to clients and dealing or processing errors. Fewer than 10% of asset managers now fear a rogue trader scenario as controls continue to tighten.
The report found that functional unbundling is increasing polarisation between investment product providers and distribution channels, stripping friction from the market, and eliminating all but the best value offerings and propositions. Outsourcing has risen to 10% of total fund manager costs.
PriceWaterhouseCoopers also reported that industry consolidation and M&A activity continues to be a feature of the industry driven by an increasing focus by investment managers on globalising their client bases. Profitability increased across all participants in the survey with margin on revenue in 1999 rising from 29.2% in 1998 to 29.7%.
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