New products the focus for investment managers

According to a new the latest imprint of the CBI/PwC Financial Services Survey, while the pace of growth in optimism has slowed, investment firms remain positive about business opportunities.

New products the focus for investment managers

According to the latest CBI/PwC Financial Services Survey, while sentiment about the overall business situation rose for the tenth consecutive quarter, but at the weakest pace since December 2011.

The survey, which looks at the balance or difference between the percentage of respondents replying ‘more’, ‘above normal’ or ‘up’ and those answering ‘less’, ‘below normal’, or ‘down’, questioned respondents on everything from value and volume of business and costs and charges to marketing expenditure and capex expectations.

The number of people who felt current business volumes were above normal during the quarter fell significantly from three months ago, but there was a jump in positive answers looking forward for the next three months.

In terms of the value of fee, commission and premium income the number of people who saw a positive trend over the last three months and who expect things to improve over the course of the next three months also rose significantly.

Paula Smith, PwC’s UK asset management leader, said: “Growth in business volumes and fee income is expected to continue over the coming months. Growing risk appetite is expected to boost activity with both retail and wholesale investors.

As a result, the number of respondents who expected to see employment numbers improve over the next three months, jumped, as did expectations of higher wage bills.

In terms of the outlook for growth, firms expect it to come across the board, from cross sales to both new and existing customers, but particularly from new products.

“Firms see the development of new products and services as increasingly important to growth. This reflects increasing investor demand for low fee products such as exchange traded funds. Investment in new post-retirement products could also grow over the coming quarters,” Smith added.

But, the numbers also show an increase in expectations of M&A activity in the sector, the survey showed, as well as a continuing focus on strategic partnerships and an increased interest in international expansion.

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