Behemoths such as Alphabet Inc., Apple Inc. or Amazon.com Inc. have the size, brand recognition, distribution capabilities — and, of course, the technology — to compete with traditional long-only managers, industry observers said.
And asset management isn't immune to disruptive forces that these giants have unleashed against other established rivals, they added.
"They have the ambition, appetite and resources," said Thusith Mahanama, co-founder and CEO of the Boston-based client reporting services provider Assette LLC.
Industry experts said technology companies already are getting into the asset management business in North America, albeit slowly and indirectly. Meanwhile, in Asia, technology giants such as Alibaba Group Holding Ltd., SoftBank Group Corp. and Paytm already have entered the money management business.
"The tech giants control such an enormous part of our lives online, financial services could be one of those things that could make sense for them to offer," said Michael A. Rosen, managing partner and chief investment officer of Angeles Investment Advisors LLC, Santa Monica, Calif.
Added Mr. Rosen: "We've shown that we're willing to trust our data — even intimate data — to a lot of these companies. They don't just have brand awareness but a trust in the brand that is very valuable."
However, these companies would still face challenges, from regulatory hurdles to being novices competing with seasoned professionals to jeopardizing their reputations if they fail to deliver strong performing strategies.
Representatives from Apple and Amazon declined to comment. Microsoft Corp. and Alphabet, the parent of Google LLC, did not respond to requests for interviews.