Warning 'second wave' of asset management industry disruption to come from tech firms

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Rating agency Moody's Investors Service has warned the lack of innovation and long-term underperformance in the asset management industry has left the door open for tech firms to disrupt and gain market share.

In research looking at the global asset management industry, Moody's said the sector could expect a "second wave" of disruption following the adoption of low-cost index funds, which have already compressed fees and pressurised firms' business models leading to mega-mergers. Although US tech giants such as Amazon and Apple were unlikely to enter the market solely in the hunt for management fees, Stephen Tu, vice president and senior analyst at Moody's, said there were a number of ways these companies could disrupt, particularly from a distribution perspective, and "to facilitate data coll...