Investment management business volumes rose at a lively pace over the last quarter, though by less than expected, according to the 100th CBI/PwC Financial Services Survey.
With costs broadly stable, profitability rose at the fastest pace in over a year.
Volumes growth is expected to soften next quarter (albeit staying robust), but profits are predicted to rise buoyantly again.
Mark Pugh, PwC’s UK asset management leader says: “Buoyed by growing volumes of business, investment managers are increasingly optimistic. Positive forecasts for retail and institutional demand reflect the strength of equity markets, yet it remains to be seen if tighter monetary policy in 2015 will slow the current rate of inflows.
“Despite enjoying a very good year, firms are keen to defend their margins and avoid cost inflation.
"Technology spending is increasing due to regulatory requirements and efforts to reach new customers. A growing investment in digital distribution illustrates firms’ desire to get closer to retail investors.”