The 2011 Advent Users Group (AUG) annual Asset Management Operations and Compensation Survey, which is co-sponsored by the Investment Adviser Association (IAA) and Advent Software, has found that asset management firms benefitted from market growth and recovering fund flows, which contributed to a 16 per cent year-over-year revenue growth and a rise in compensation for investment management executives and professionals.
Furthermore, despite the uncertain economy, profit margins were up from the previous year, fuelled largely by cost-cutting measures initiated in response to the financial crisis.
"The AUG survey offers invaluable insights into the trends shaping the asset management industry. Listening to our clients and understanding their needs is critical in our effort to develop new technology solutions that offer competitive advantage and support our clients’ growth," says Anthony Sperling, senior vice president and general manager, Asset Management Group, Advent. "This year’s survey results underscore the importance of technology solutions to support operational efficiency and help clients focus on what matters most to them — the ability to adapt to market conditions and deliver great results for their clients."
The survey found that across the asset management industry, managers continued to diversify the types of products they manage for clients.
Spending on investment operations rose at a steady pace, while profit margins increased. In an effort to remain focused on client services, an increasing number of firms are delegating operations and support functions to third parties in order to achieve cost benefits and scale, gain access to additional resources and expertise, and address regulatory requirements.
For investment management industry professionals, overall compensation rose during the last year, with senior executives and investment professionals receiving higher pay. Despite the fact that most professionals received larger bonuses than the previous year, fewer big earners meant lower top quartile numbers and a contracted compensation range.
"Industry benchmarks and an understanding of best practices are critical in helping firms effectively gauge their success and accurately plan for future growth," says Erin Kestner, director of development, Advent Users Group. "The findings provide the most comprehensive industry metrics to help professionals at all levels better understand and prioritise strategic initiatives for their firms."