Asset managers face nine major challenges as they work towards a rebound in 2012, according to a report released by the accounting firm PriceWaterhouseCoopers.
The report, Top Issues Facing Asset Managers, states that asset management is in recovery mode, yet challenges such as volatile markets and the implementation of new regulations could make the remainder of 2012 a turning point for many companies.
The challenges identified in the paper include issues related to governance, navigating risk complexity and navigating regulatory complexity.
Other issues concern delivering cost-effective technology and operations, Foreign Account Tax Compliance Act and global information reports as well as concerns related to trust and transparency.
The final challenges are maximizing value from mergers and acquisitions, pursuing growth as well as growing and leveraging human capital.
“Even as it enjoys this mild resurgence, the industry continues to face challenging markets, the implementation of regulatory reform initiatives, competition for clients and talent and new expectations from investors, regulators, industry partners and other stakeholders,” the report states.
“Under such circumstances, asset managers are attempting to generate improved performance results, rebuild profitability, manage risk, compete for talent and achieve the operational excellence that will drive future growth.”
Asset managers are now powerless in the face of these challenges, the report states. For example, in the area governance, asset management directors may consider defining and periodically evaluating the appropriate governance committee structure, roles, decision rights and supporting management processes to promote effective decision-making and manage risk.
“In spite of the challenges it faces, the asset management industry is positioned for performance and future growth. However, success is not guaranteed nor will it be universal. The firms that succeed will be those that can take transformational steps to adapt to changes in the industry and take advantage of the opportunities opening up in the global marketplace,” according to the report.
“Those firms that can successfully adapt and compete will be the winners in this larger arena,” it adds.