Operating margins for traditional publicly traded U.S. money managers fell by more than 20% over the five years ended Dec. 31, according to Casey Quirk, a Deloitte Consulting business.
In the "A Rising Tide Tips All Boats" report released Wednesday, Casey Quirk researchers found that the median operating margin for U.S. money managers was 27% in 2019 compared to 34% five years earlier.
The biggest reason behind the slump in profit margins was the drop in fees for assets managed, the report showed, with revenue down a total of 22% in the five-year period ended Dec. 31.
Casey Quirk's analysis found that fee pressure has been increasing with negative revenue in each year over the past five years: 2015, -3.8%; 2016, -5.1%; 2017, -4.8%; 2018, -5%; and 2019, -6.1%.
"What surprised me about the results of our analysis was the magnitude of the change in revenue and the persistency of the trend," Casey Quirk principal Amanda Walters said in an interview.
"The situation keeps getting worse," she said. "People ask when fee pressure will abate, but there are no signs of that happening and in fact, the decline is accelerating."
