The Alchemist - Of minnows, big fish and dark pools

Financial advisers used to recommending funds and products from the same old set of "usual suspects" in the industry can expect a new class of challengers to emerge in coming months.

This is the result of changes in capital adequacy requirements for parent banks, a growing trend of breakouts from bigger institutions and new interest in M&A activity in the sector. Although the past two years have been as traumatic as any for a generation, banks and asset managers learned the lesson from the 1970s – not to flog off their most valuable revenue-generating units at the bottom of the market. So, parent firms have been sheltering from choppy waters in deep pools, hoping to hold out until the global economic upturn arrives. The survival limit for many firms was March. If ...