Mass consolidation will cut the number of global money management firms in half by 2030, according to a news release on a report from KPMG.
The change will create a more challenging world for money managers’ survival as a result of what the report, “Investing in the Future,” calls megatrends.
The megatrends include demographic shifts, technological developments, awareness about the environment, and social behavior, ethics and values.
By 2030, according to the report, 13% of the global population will be older than 65 years, compared with 8% of the global population in 2014.
“Demographics are changing. People are living longer and taking greater responsibility for their own retirement planning,” said Tom Brown, global head of investment management, at KPMG International, in the news release.
“Younger generations will likely save more as they see their parents run out of money in retirement. We also expect to see a significant boost of new money from the growing middle class in China, Mexico, India, Nigeria and other developing economies over the next 15 years.”
“The successful asset managers of tomorrow must focus on building cradle-to-grave relationships with a dramatically different and more diverse client base from today, which includes much younger investors,” Mr. Brown said.
Environmental awareness, as well as a growing acceptance by investors and managers regarding environmental, social and governance factors, should result in significant growth in socially responsible investing by 2030, while the 50% increase in food production by that year required by a growing global population will create what the report terms “a range of interesting investment opportunities.”
Changes in technology also will affect what investors expect from money managers, with more investors demanding more personalized information, education and advice.
Separately, the report also mentions the possibility that by 2030, giant companies like Apple, Google and Amazon could become major players in money management. The report mentions the companies could enter the money management playing field due to their “brand ubiquity, which is increasingly trusted by younger generations, propositions that engage and are relevant, business models which put them at the center of extensive networks designed to make clients' lives easier, solve problems and change behaviors.”
The full report is available on KPMG’s website.