Independent asset managers are significantly more efficient than their peers – fact.

A new study of the cost-efficiency of more than 25 asset managers in the UK has confirmed what was until now an uncorroborated fact in the industry; independent asset managers have more efficient cost structures.

The CoreData Research paper, to be released next week, reveals the top five spots in the efficiency ranking are occupied by five independent asset managers.

Henderson Global Investors, BlackRock Investment Management and the Ashmore Group make up the podium of top tier rankings with scores of 87.0%, 84.1% and 83.5% respectively.

In fact, with an average efficiency score of 77.3% over the period 2004-2011, independents have clearly outperformed their bank-owned and life and pensions affiliated competitors, which scored 70.2% and 65.3% respectively.

Asset managers linked to life and pension institutions have the lowest average cost-efficiency levels across the industry with a score of 65.5%, trailing bank-owned asset managers by almost 5% and independent asset managers by 12%.

One could argue that independent asset managers do not have the luxury of internally sourcing asset flows as their institutionally owned counterparts tend to benefit from.

Thus, they face stiffer competition to acquire funds, putting downward pressure on their pricing and providing stronger incentives for cost reduction and the efficient use of resources.

At the same time, more competition drives innovation and client acquisition, resulting in lower costs and higher revenues.

Competition and a narrower client base and business model may also lead to less stable revenue streams, which is an incentive for greater flexibility and drives the adjustment of their cost structure to changing market conditions faster than their competitors.

With human capital being a primary operating cost for asset managers, arguably staff may be deemed more of a flexible cost within independent asset managers, whereas institutionally owned groups are typically slower to retrench.

The cost-efficiency in the asset management industry has trailed the evolution of the economic cycle. The average level of efficiency peaked in 2005 at 78.6%, and then saw a slow decline in 2006 and 2007, to just under 75%.

In 2008 efficiency levels declined steeply, to 63.6% signalling that asset managers were producing less than 64% of what they should be producing if they were efficient, given their cost structure.

In 2009 cost-efficiency levels recovered significantly to 69.9%, and then just marginally in 2010 to 70.4%.

The size of an organisation is also a relevant factor in determining the degree of efficiency.

Small organisations with leaner administrative structures and more flexible cost bases have the potential of being agiler in adapting to a changing business environment and increasing their cost-efficiency. unshaven girl микроклад займ личный кабинетзайм под материнский капитал в сбербанкелови займ личный кабинет