Unlocking operational alpha for asset managers

The asset management industry has reached an inflection point. Persistent fee pressure, rising costs, increasing operational complexity and evolving client mandates have eroded the profitability buffer that once protected firms.

While some of these challenges have persisted since the introduction of the Markets in Financial Instruments Directive (MiFID), our recent conversations with asset managers suggest the situation has become unsustainable now, necessitating urgent action.

There is a growing consensus among asset managers that simply ‘stemming the tide’ is no longer enough; instead, a fundamental transformation of the operating model is required to be future-ready for 2026 and beyond.

Performance belies structural pressure

For more than a decade, strong market performance has masked a deeper structural challenge in the asset management industry. Strong equity markets and buoyant inflows have helped firms sustain profitability, giving the perception that operating structures were keeping pace. However, an in-depth scrutiny of the underlying drivers has exposed structural challenges, such as fee compression, rising costs, and increasing operational complexity with newer products and evolving client mandates.