Above-expectation growth in fee revenue caused UK asset managers’ profitability to rise at its fastest pace in a year during the third quarter, and firms expect the rate to continue until the end of the 2014.
The good revenues should help pay for an expanding workforce, which has grown at an above-average pace for the last two years, according to the survey by CBI and consultancy PwC.
There was further good news when it came to outgoings. “Total costs remained stable, defying near-ubiquitous predictions that costs would rise,” says the report. “Costs are expected to decline slightly in the three months to December.”
Planned spending on information technology was set to remain very high due to regulatory requirements and the desire to reach new customers online.
The results are from the 100th Financial services survey, which started in 1989. The results for asset management section were based on a survey of nine respondents carried out in September. Ninety-eight respondents participated in the overall survey.
“Buoyed by growing volumes of business, investment managers are increasingly optimistic,” says Mark Pugh, PwC’s UK asset management leader. “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.”
For the financial services sector as a whole, growth in business volumes accelerated to its fastest pace since 2007 in the third quarter, according to the survey.
©2014 funds europe
