Increased regulation the biggest challenge

Increased regulation has emerged as the top challenge for Australian asset managers this year and as they look beyond 2018, according to new research conducted by RBC Investor and Treasury Services.

The research, based on a recent poll of 33 managers provided positive news because 97 per cent of respondents indicated they were confident of their ability to adapt to the changing business environment, but also pointed to their concerns around increasing regulation and rising costs.

Commenting on the findings, RBC Investor and Treasury Services managing director, David Travers said it was clear that regulation represented the biggest challenge facing the industry, especially in the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Travers noted that while increased regulation was seen as the top challenge facing managers (20 per cent), this had been closely followed by rising costs and falling profit margins (15 per cent).

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He said that most firms appeared to have solid strategies in place for dealing with these challenges, including enhancing their service offering (23 per cent) and improving efficiency (20 per cent).

Importantly, the RBC Investor and Treasury Services research revealed that more than 60 per cent of managers expected to introduce new products in the coming year, with liquid alternatives representing the top priority for 22 per cent of those firms.

The research also revealed that managers believed client service to be the thing most valued by clients (30 per cent), followed by high returns (27 per cent), making it hardly surprising that respondents’ technology spend would be directed towards data analytics (27 per cent) and client relationship management (17 per cent).