More than half of asset managers plan to reduce charges next year, according to a survey from Brown Brothers Harriman out Tuesday. Average fees in Europe have already hit a record low, as the rising popularity of cheap passive products increases competition, Morningstar Inc. said in a separate report.
“Managers need to reflect and take a hard look at themselves,” said Shawn McNinch, managing director of investor services and head of U.S. sales at Brown Brothers Harriman. “The challenge for mid-sized managers is to really focus on where they’re different and where they can add value.” The competition has already driven some active managers to join forces, with Franklin Resources Inc. buying Legg Mason Inc. this year. Yet the results of such consolidation have been mixed, with Janus Henderson Group Plc and Standard Life Aberdeen Plc failing to staunch outflows since their mergers three years ago.