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Aligning operating models and strategic priorities

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EY Wealth & Asset Management’s comparison of globally integrated and multi-boutique operating models can help firms determine what’s more important: synergy or autonomy.

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Aligning operating models and strategic priorities

  1. 1. Asset management operating models — synergies or autonomy — where’s your focus? With costs and stakeholder pressure on the rise, firms may need to re-evaluate their asset management operating model. As you read through our comparison of operating models below, keep the following questions in mind: Globally integrated Multi-boutique ©2017EYGMLimited.AllRightsReserved.BMCAgencyGA1005615.EYGno.04903-174GBL.EDNone. Please contact your EY representative to learn more. Larger number of unrated funds, on an absolute basis, suggesting they have launched more funds recently Launched more funds in proportion to their existing number of funds Increased focus on active funds In line with the industry; increased focus on passive funds Held one-third of the global AUMHeld two-thirds of the global AUM Net flows favorable since 2012, on an absolute and relative (to AUM) basis Net flows unfavorable since 2012, on an absolute and relative (to AUM) basis Lower cost-to-income ratios, indicating they have been managing their costs efficiently Higher cost-to-income ratios Decreasing operating margins since 2013, but globally integrated firms have trended higher Decreasing operating margins since 2013 Lower revenue margins, due to focus on low cost or passive funds Higher revenue margins, due to focus on active funds and hence higher fees per AUM Generated lower shareholder returns Generated higher shareholder returns • Does your operating model align with your current strategic priorities? • As margin pressures continue, what is more advantageous — integrated synergies or autonomy?

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