The survey report, which asked 185 industry CEOs from 45 countries which three cities will be the most important for growth in the next 12 months, shows that both Beijing and London received votes from 21% of the CEOs.
However, New York (23%) topped the list.
Globally, the US still has the largest share of the asset and wealth management industry, the study said.
The survey findings suggest some surprising results. One, that asset and wealth managers believe that London will remain a leading global financial hub in spite of the Brexit vote, and two, that Beijing is emerging as a global wealth management centre.
Also benefiting from rising Chinese wealth, Hong Kong and Shanghai were voted by 17% and 15% of the CEOs, respectively.
Elsewhere in Asia, Singapore is only mentioned by 9% of the CEOs.
By country, the US remains the most important country (54%), followed by China (28%), Germany (25%) and the UK (18%).
According to the survey, a majority of the CEOs (92%) are either very or somewhat confident about their firms’ revenue growth in 2017.
However, they acknowledged pressure on profit margins.
“We know that margins will continue to compress and that our clients will continue to demand more tomorrow than they did yesterday,” Brian Conroy, Fidelity International’s president, said in the survey report.
CEOs are also less sure of the global economy. Nearly 85% of the CEOs cited uncertain economic growth as a risk that may hamper the growth of their business, followed by over-regulation and an increasing tax burden.
External risks for AM and WM CEOs
|Uncertain economic growth||
|Increasing tax burden||
|The future of the Eurozone||
|Exchange rate volatility||
Within their businesses, the top three biggest concerns of CEOs are the availability of key skills, speed of technological change and hanging customer behaviour.
“We need to focus on taking the best athletes – those who are leaders or with clear leadership capabilities versus those with specific qualifications or subject matter expertise,” Joe Sullivan, Legg Mason’s CEO, said in the survey.
|Availability of key skills||
|Speed of technological change||
|Changing customer behaviour||
|Lack of trust in business||
|New market entrants||
JVs on the horizon
Many of the industry’s CEOs are also planning some kind of corporate activity to drive profitability. Around 52% are looking to strategic alliances or joint ventures, while 41% are plotting a merger or aquisition.
Last year, there were mergers in the sector as smaller firms combined to gain distribution power and larger firms did so to gain scale at a time when active asset managers face dwindling sales, rising costs and fee pressure, the survey said.
Examples of these activities are the Henderson and Janus Capital merger deal, which is expected to be completed in the second quarter this year, and Amundi’s purchase of Pioneer Investments, which is expected to be completed in the first half.
“It has become harder to be able to invest in the business for future growth, as some of the more mandatory requirements, driven by regulatory change, have eaten into any budget you would have in that,” Andrew Formica, Henderson Asset Management’s CEO, said in the survey report.
“Janus Henderson is about getting back that ability to give us sufficient scale to meet our regulatory and mandatory responsibilities to our clients and the investments we need to make,” he said.