Mercer Capital’s Asset Management Industry newsletter is a quarterly publication providing perspective on valuation issues pertinent to asset managers, trust companies, and investment consultants. Each issue includes a segment focus, market overview, mergers and acquisitions review, and more. Segments covered are mutual fund companies (1st quarter), traditional asset mangers (2nd quarter), alternative asset managers (3rd quarter), and trust banks (4th quarter).
The Q2 2015 issue segment focus is Traditional Asset Managers. Excerpting from the discussion:
Technology firms are increasingly attracted to the asset manager space with the rising popularity of robo-advisors. The low cost option afforded by these online asset allocators is a serious threat to financial planners offering wealth management advice to priceconscious consumers. The expanding cost of regulation and weak organic growth prospects are additional headwinds for the sector. While most traditional asset managers have enjoyed significant increases in EPS over the last three years with the stock market rally, organic AUM growth has only been 1% over this period, bringing the group’s P/E ratio to an all-time low versus the S&P 500, according to Goldman Sachs analyst Alexander Blostein. Increasing competition from robo-advisors and the rising popularity of passive investment alternatives are the likely culprits for much of the recent decline in asset flows.
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