reports

The asset management industry faces significant change in light of the erosion of its profitability. Firms have already downsized cost structures by an average of 12%, but despite these efforts, kasina estimates that net profit margins industry-wide have fallen from 20% to 8% over the past year.

Compounding the financial pressure are three trends that will force asset managers to transform existing distribution strategies:

• Increasing Centralization of Investment Decisions
• Escalating Wholesaling Costs
• Increasing Firm/Distributor Relationship Complexity

To preserve and grow profitability, long-term distribution strategies must be transformed in two fundamental ways:

• Increase the Emphasis on National Accounts: Based on what distributors want most from asset managers, and the changes occurring within these distributors, positioning top-notch National Accounts Managers to coordinate strategies will be the key driver of distribution success.
• Adjust Wholesaling Models: The implementation of hybrid strategies, refinement of compensation models, and the further integration of the Web into sales models will enable firms to wholesale their products with greater efficiency.

To create Evolving Distribution Amid Bad Markets, Changing Distributors, and Lower Profits, kasina conducted a financial analysis of publicly-traded asset managers, surveyed 40+ leading industry distribution executives, and interviewed key executives at the industry's largest distributors, including, Bank of America, LPL, Merrill Lynch, Morgan Stanley, Smith Barney, and UBS.

This report gives asset managers the tools necessary to create long-term distribution success in a volatile distribution environment.