Asset Managers Facing Baby Boomer Buzzkill
Baby boomers are not the greatest generation – that's according to both Tom Brokaw and the asset management industry, which may soon see its growth marginalized by retirees pulling their savings.
The report, authored by management consultancy Casey Quirk, paints a divergent picture of the asset management industry. Fund managers will generate a collective $500 billion a year over the next five years, up from the $350 billion today, but the vast majority of the growth will be due to rising markets, according to Financial News.
New client money will top out at around $300 billion a year during this period, well down from the $3.5 trillion per year pumped into the industry before the economic collapse. And it’s all those baby boomers’ fault, along with corporations and government institutions that are no longer willing to invest in pricing pension funds and welfare systems.
Overall, investment managers will grow less than 1% a year from net new money through 2017, while also facing a “decaying book of legacy business,” says Casey Quirk, which predicts that a select few firms will soon dominate the industry. The good news: the firms that will win the asset management war will be those that build larger sales teams and create economic incentives to recruit and retain talent, according to the report.
Job cuts at big banks are beginning to trickle down and hurt vendors. Thomson Reuters, which sells trading terminals and other financial data products, will cut 2,500 jobs from its financial and risk division by the end of the year.
ING whiffed on its fourth quarter estimates and will now need to purge additional staff. The Dutch bank will slash 2,400 jobs in its retail banking business, bringing the total number of job cuts announced in the last year to roughly 7,500.
We told you earlier this week how digital trails left by emails and IMs are the smoking guns in most Wall Street investigations. Without them, it’s difficult to prove intent. Maybe that’s why investigators are having trouble digging up insider trading evidence against Steven A. Cohen and his firm, SAC Capital Advisors, which had a policy of automatically deleting emails.
Legg Mason surprised some Wall Street analysts by naming interim chief executive Joseph Sullivan its permanent CEO following a grueling five-month search. Sullivan had held the interim tag since Oct. 1 when his former boss, Mark Fetting, was pressured to step down amid a poor five-year run for the asset manager.
Unions and analysts are convinced that French bank Societe Generale will make further job cuts as part of its restructuring effort.
Jim Cramer, a former hedge fund manager and the current host of CNBC’s “Mad Money,” was essentially homeless for several months after graduating from Harvard Law School.
Buzz Around the Office
A Michigan woman checked herself into the hospital last week with what she thought was a hernia. She gave birth to a 10-pound baby girl hours later, never realizing that she was pregnant.
List of the Day: Office Romances
Thinking about dating someone in the office? It’s dangerous, but if you feel you must, follow these guidelines.
- Know your company policy and follow it.
- Don’t flaunt your relationship.
- Expect to be the subject of gossip.