According to a report from Boston-based research firm Cerulli Associates, professionally managed assets declined by USD10 trillion in 2008.
According to the Cerulli Quantitative Update: Global Markets 2009, While it took the industry almost three years to add USD10 trillion in assets between 2005 and 2007, it took less than six months to lose most of that money.
The decline has hit asset management fees, reflected on some weaker quarterly reports by asset managers. Charles Schwab, a provider of investment services, saw its second-quarter profit drop by approximately a third, mainly due to the fall in asset management fees
However, according to the Cerulli report, more than 70% of advisors expect to increase their usage of managed accounts.
This trend is already taking place, with a total of USD136 billion flowing into stock and bond funds from April-June 2009, according to New York-based firm Strategic Insight.
“Investors are tiptoeing back into riskier asset classes,” said Loren Fox, a Strategic Insight research analyst. Yet it would seem the industry is still clearly shaken when stock funds are deemed as an asset class that should be treated with caution.
Giles TurnerNews Editor