PricewaterhouseCoopers has undertaken an interim update of its 2001 UK investment management survey to assess the industry’s response to increased competition and the aftermath of 11 September.
21 firms with over 1000 billion under management participated in the interim update.
An interim update of the survey carried out in October 2001 revealed that margins have so far fallen by only around a quarter. This has been driven by two factors:
– Despite falling fund values, revenue has so far been sustained, thanks to a strengthening in pricing. This is very encouraging as it reverses the previous steady decline witnessed over the past 6 years;
– Costs have yet to fall, but the rise has at least been checked; after continued increases during the first quarter, costs have been flat across the industry for the last six months.
These results show the immediate impact of a range of short term cost management measures; 80% of fund management companies have over this period taken steps to reduce and/or defer investment spend, 75% have significantly reduced marketing spend, and two in three have curtailed recruitment. One in three have also launched new alternative investment products this year, generating higher fees.