Four-fifths of top asset management staff are anticipating a money management shakeup to rival that of Apple taking on the music industry. And they seem pretty resigned — and passive about it.
In a recent poll of 400 senior money managers, State Street found that 79% are bracing themselves for direct competition from a new entrant outside of the traditional finance world, the Financial Times reports. Internet companies like Amazon and Google have destroyed traditional buying, searching, and education, all of which could be applied to finance. Google has already been rumored to be considering a money management move. Writes the FT:
Helena Morrissey, chief executive of Newton Investment Management, the UK fund company, said: “Google and Amazon entering the market is a real possibility. The trouble is, we as an industry always seem to be behind the curve on these things, but it is good that people are worried, as it will sharpen up our act.”
In China the revolution has started, with a number of large internet companies, including Alibaba, distributing money management products. Aberdeen Asset Management CEO Martin Gilbert says he is “paranoid about this.” Financial companies flirt with complacency in thinking no one else can manage money like they can, but they’re wrong, he says.
That said, operating an asset management firm isn’t cheap, and may not be worth the price for a company like Google. Chinese investors are also very different from their Western counterparts, and may be more receptive to an Alibaba-like product.
“However, the next generation of investors will be totally different to the ones we have now,” says Alexander Schindler, a member of the executive board at Union Asset Management and newly elected president of the European Fund and Asset Management Association. “It is not the behaviour of Google we need to worry about but the behaviour of our clients.”
Photo: Adrian Korte via Flickr.