Mutual fund and other asset management firms need to do a better job of analyzing the profitability of products, channels, clients and back-office systems to improve operating margins, according to a report from Capco Institute of New York. Although assets under management have increased for many firms and average operating margins are above 30%, among the highest in the financial services industry, profits vary widely among firms, depending on their offerings and the scalability of their business models.

"Sustaining Growth in Asset Management Profitability: Trends, Challenges and Opportunities," written by Edward Hawthorne, managing principal of Capco, takes a deeper look into recent trends that have impacted the financial performance of U.S.-based asset management firms, and suggests ways that firms can sustain asset management profitability.

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