Industry Analysis & Industry Trends
In an effort to gain new assets, the industry will continue its trend toward lower fees. However, as fees fall, some firms will be unable to compete while maintaining positive profit. Even so, the industry will return to growth from recessionary lows, especially as the US population ages and requires help with retirement funds. The range and sophistication of financial products will also expand, and players will boost revenue generated outside of the United States. In response to the global financial crisis, regulation of the financial system is being tightened, streamlining industry revenue and limiting profit growth... purchase to read more
Industry Report - Industry Investment Chapter
Capital intensity in the Portfolio Management industry is low, with the ratio of depreciation to wages at 0.08:5. This ratio means that only 4 cents is spent on computing and communication equipment for every dollar spent on labor. Capital-intensive IT functions, such as trading and asset services, are outsourced to securities brokers and custodial banks. IT outsourcing to these third-parties has allowed the industry to transition from a fixed to a more variable cost structure that enables industry players to keep profit levels high.
Instead, the industry is considered labor intensive, with wages accounting for about 23.4% of 2013 revenue. Labor expenses include the wages, performance bonuses, and benefits paid to professionals and administrative staff... purchase to read more