While the financial service company’s Evolving Investment Management Regulation report points out the ‘seemingly endless waves of regulation facing asset managers’, it also highlights the many opportunities that come with these challenges.
According to the report, a key element of the new investment landscape is the shift of responsibility – and the risk – from state and employer towards the personal investor for retirement income/long-term financial security.
“This direction of travel is particularly clear in pensions markets,” the report states. “But it is vital to get regulation right to enable the industry to best serve society.”
The report also predicts that the continued drive towards better long-term savings and financial stability will continue to grow and create opportunities for funds managers, with an influx of funds flowing across the globe in consumers’ efforts to save for retirement and long-term security.
Even regulatory initiatives that have onerous elements for the investment management community offer some opportunities, according to the report. “For example, shadow banking proposals that may see investment managers leading the way, where banks can no longer follow.”
The report points to ‘significant opportunities’ for investment in companies ‘established or in the process of establishing a significant presence in emerging and new markets such as Africa’ as well as the Middle East.
It also predicts that there will be an increased push on investment from the retail sector. “Investors in the developed countries hold over 80% of total financial assets, according to KPMG analysis, with households by far the largest investor class followed by institutional investors. An increased focus on the retail investor is therefore inevitable,” the report states.
“The investment firms who stay on top will be those who can capitalise on the opportunities that are emerging now – and do not wait until the dust has settled. Those who are not prepared are unlikely to survive in this new world,” said Tom Brown, KPMG’s global head of investment management.
