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GLOBALASSETMANAGEMENT2015SPARKINGGROWTHWITHGOTOMARKETEXCELLENCETHEBOSTONCONSULTINGGROUPBCGISAGLOBALMANAGEMENTCONSULTINGRMANDTHEWORLDSLEADINGADVISORONBUSINESSSTRATEGYWEPARTNERWITHCLIENTSFROMTHEPRIVATE,PUBLIC,ANDNOTFORPROTSECTORSINALLREGIONSTOIDENTIFYTHEIRHIGHESTVALUEOPPORTUNITIES,ADDRESSTHEIRMOSTCRITICALCHALLENGES,ANDTRANSFORMTHEIRENTERPRISESOURCUSTOMIZEDAPPROACHCOMBINESDEEPINSIGHTINTOTHEDYNAMICSOFCOMPANIESANDMARKETSWITHCLOSECOLLABORATIONATALLLEVELSOFTHECLIENTORGANIZATIONTHISENSURESTHATOURCLIENTSACHIEVESUSTAINABLECOMPETITIVEADVANTAGE,BUILDMORECAPABLEORGANIZATIONS,ANDSECURELASTINGRESULTSFOUNDEDIN1963,BCGISAPRIVATECOMPANYWITH82OCESIN46COUNTRIESFORMOREINFORMATION,PLEASEVISITBCGCOMGLOBALASSETMANAGEMENT2015SPARKINGGROWTHWITHGOTOMARKETEXCELLENCEGARYSHUBBRENTBEARDSLEYHLNEDONNADIEUNICKGARDINERCRAIGHAPELTBENOTMACNEILPARDASANIKATIETAMARELLITJUNTANGYASUHIROYAMAIJULY2015|THEBOSTONCONSULTINGGROUPCONTENTS36INTRODUCTIONASNAPSHOTOFTHEINDUSTRYASSETSUNDERMANAGEMENTRISETOARECORD74TRILLIONEUROPESNETFLOWSREBOUND,CATCHINGUPTOTHOSEINTHEUSGROWINGPRESSUREONFEESIMPACTSNETREVENUESPOSITIVERESULTSACROSSALLREGIONSANDSEGMENTSTHEPRODUCT“WINNERTAKEALL”ACCELERATESINTHEUS,FLATTENSINEUROPE1520THEDATADRIVENPATHTOGOTOMARKETEXCELLENCEDATADRIVENDECISIONSANDTHEROLEOFBIGDATATHEFUTURESTATEOFMARKETINGEECTIVENESSENHANCEDSALESFORCEPRODUCTIVITYDATADRIVENROIBETTERCUSTOMEREXPERIENCESERVINGBYSEGMENTINGCATCHINGTHEREBALANCINGWAVETOWARDASIAWEIGHINGNEARTERMCONCERNSANDLONGTERMGROWTHTHEINSTITUTIONALMARKETOERSNEWINROADSCOMPETINGVISIONSFORTHERETAILFUNDBUSINESSADIGITALFUTURETHEWAYFORWARDGLOBALLOCALPARTNERSHIPS2425FORFURTHERREADINGNOTETOTHEREADER2|SPARKINGGROWTHWITHGOTOMARKETEXCELLENCEINTRODUCTIONIN2014,THEGLOBALVALUEOFPROFESSIONALLYMANAGEDASSETSGREWTO74TRILLIONTHETHIRDCONSECUTIVEANNUALRECORDANDTHEINDUSTRYSPROTSROSETOMATCHTHEIRHISTORICPEAKOF102BILLIONOPERATINGMARGINSREMAINEDSTEADY,SITTINGJUSTBELOWTHERECORDLEVELACHIEVEDBEFORETHENANCIALCRISISTHESEDATAPOINTS,AMONGOTHERS,OFFERANENCOURAGINGSNAPSHOTOFTHEGLOBALASSETMANAGEMENTINDUSTRYAMORECOMPLEXPORTRAITEMERGESINTHEFULLDETAILSOFTHISREPORTGLOBALASSETMANAGEMENT2015SPARKINGGROWTHWITHGOTOMARKETEXCELLENCE,THEBOSTONCONSULTINGGROUPSTHIRTEENTHANNUALSTUDYOFASSETMANAGEMENTWORLDWIDETHISREPORTBEGINSBYPROFILINGTHEINDUSTRYSOVERALLEVOLUTIONIN2014NEXT,WEDISCUSSHOWLEADINGMANAGERSAREIMPROVINGTHEIRGOTOMARKETAPPROACH,INPARTICULARTHROUGHMOREDATADRIVENDECISIONMAKINGTHESEFINDINGSWERESUPPORTEDBYANINDEPTHMEASUREMENTOFMANAGERSCAPABILITIESBASEDONBCGSFRAMEWORKFOREXCELLENCEINGOTOMARKETFUNCTIONSINCLUDINGMARKETINTELLIGENCE,PRODUCTDEVELOPMENT,CLIENTCOMMUNICATIONS,SALESCOVERAGEMODEL,SALESPERFORMANCEMONITORING,ANDORGANIZATIONSETUPANDINCENTIVESFINALLY,INTHETHIRDCHAPTER,WEOFFERADEEPDIVEONTHEEXPANDINGOPPORTUNITIESINASIAPACIFICANDHOWMANAGERSCANACCESSTHEMPROFESSIONALASSETMANAGEMENTCONTINUESTORANKAMONGTHEWORLDSMOSTPROFITABLEBUSINESSES,ANDITSAGROWINGONEFORMANAGERSTHATGETITRIGHTTHEPASTYEARSPERFORMANCESHOWSTHATTHEINDUSTRYHASMOVEDBEYONDTHEDYNAMICSOFTHEPOSTCRISISPERIODATTHESAMETIME,ANEWCOMPETITIVEENVIRONMENTISCOMINGINTOSHARPERFOCUSITISACHALLENGINGENVIRONMENTALTHOUGHTHEINDUSTRYSPROFITPOOLROSE7PERCENTTO102BILLION,MATCHINGITSHISTORICPEAK,THOSEPROFITS,ONCEAGAIN,WERELARGELYDRIVENBYRISINGASSETVALUESONGLOBALMARKETSGROWTHDRIVENBYNETNEWASSETSREMAINEDUNCHANGEDFROMTHEYEARBEFORE,AT17PERCENTOFASSETSUNDERMANAGEMENTAUMNETFLOWS,THELIFEBLOODOFGROWTH,ARELIKELYTOREMAININTHELOWSINGLEDIGITSWELLBELOWPRECRISISLEVELSATTHESAMETIME,NETREVENUEGROWTHFELLSHORTOFTHEGROWTHOFAVERAGEAUMASPRESSUREONFEESSQUEEZEDPRICEREALIZATIONTHISISNTTHEFIRSTYEARTHATFEEPRESSUREHASCONTRIBUTEDTODECLININGREVENUEMARGINSINSTITUTIONALINVESTORSAREMONITORINGFEESMORETHEBOSTONCONSULTINGGROUP|3CLOSELY,CHALLENGINGANDRENEGOTIATINGTHEMINTHERETAILSEGMENT,CHANNELCONSOLIDATIONANDINCREASINGTRANSPARENCYDRIVENBYREGULATIONAREDRIVINGFEESLOWERTHEPRODUCTSHIFTOFRECENTYEARSFROMTRADITIONALACTIVELYMANAGEDPRODUCTSTOPASSIVES,SOLUTIONS,ANDSPECIALTIESHELDTRUEIN2014THISSTRUCTURALSHIFTWILLCONTINUEINTHEMEDIUMTERM,WEBELIEVE,SQUEEZINGTHESHAREOFACTIVECOREPRODUCTSANDMANAGERSTHEGAPINBUSINESSPERFORMANCEBYSEGMENTWIDENEDBETWEENMANAGERSINTHERETAILMARKETANDTHOSEINTHEINSTITUTIONALMARKETFORTHESECONDYEARINAROW,RETAILFOCUSEDMANAGERSOUTPERFORMEDTHOSEFOCUSEDONINSTITUTIONALMARKETSBYRELATIVELYWIDEMARGINSINAUM,REVENUE,NETFLOW,ANDPROFITABILITYGROWTHWHATEVERTHEIRSEGMENTORPRODUCTFOCUS,ASSETMANAGERSTODAYFACEAFUTUREINWHICHGROWTHISNTAGIVENSUPERIORINVESTMENTPERFORMANCEDOESNOTGUARANTEEGREATERMARKETSHARETHEDYNAMICSOFCOMPETITIVEADVANTAGEHAVECHANGEDACHIEVINGGROWTHWILLREQUIREMANAGERSTORAMPUPTHEIREXECUTIONGAMEINORDERTODIFFERENTIATETHEMSELVESINPARTICULAR,THEYWILLNEEDTOGENERATEMOREVALUETHROUGHENDTOEND,GOTOMARKETEFFORTSFROMDESIGNTOEXECUTIONBYLEVERAGINGTHEIRMARKETING,SALES,ANDPRICINGCAPABILITIESALTHOUGHTHETRADITIONALFRAMEWORKFORMAXIMIZINGGOTOMARKETPERFORMANCEREMAINSINTACT,THECOMPETENCIESNEEDEDTOACHIEVEEXCELLENCEARESHIFTINGINMANYCASES,THEWINNINGMANAGERSGAINADVANTAGEBYDEVELOPINGANDDEPLOYINGADVANCEDCAPABILITIESINDATADRIVENDECISIONMAKINGMANYOFTODAYSMOSTEFFECTIVEMANAGERSFOCUSTHEIREFFORTSONTHRE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