Investors will continue to be afraid of losing hard-earned money and gravitate to fixed-income and other safe investments, The Boston Consulting Group predicts. As a result, investment management firms need to offer new portfolios and, with fees on these offerings undoubtedly lower than aggressive, actively managed funds, they will have to cut costs even further.

Because firms lost 18% of assets in 2008, ending the year with $48.6 trillion in global assets, profits fell 34% in 2008. Profits will probably decline another 30% in 2009.

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