Alternative assets drive product, operations changes
Changes in the investment environment, notably the growth of private equity and hedge fund investments, are likely to force financial services companies to rethink their organisational structures and products, according to a report from consultancy Deloitte Touche Tohmatsu.
Private equity funds attracted a record $261 billion in 2005, while inflows into hedge funds, despite a slight cooling during the year, reached $1 trillion worldwide.
According to the Deloitte report, Financial Services in 2010: Hallmarks of Success, the growth of individual hedge funds will continue to outpace other assets, although at a slower rate than experienced to date.
Deloitte partner of financial services assurance and advisory Gerry Schipper said alternative assets used sophisticated financial techniques and efficient methods of deploying capital, such as bulk trading.
He said that to compete, traditional financial services organisations would need to reduce margins, consolidate operations and incorporate hedge fund and private equity-like thinking into their business models.
Financial services companies will also need to be more innovative in developing products for retiring baby boomers, the report said.
Recommended for you
Technology firm Iress and investment manager Challenger have formed a strategic partnership to launch an adviser solution to better serve their retiring clients.
There have only been a “handful” of opportunities in the last 20 years when infrastructure has looked as cheap relative to equities as it does now, according to Lazard, making it a viable option to provide portfolio security amid market volatility.
The Australian Financial Complaints Authority has reported an 18 per cent increase in investment and advice complaints received in the financial year 2025, rebounding from the previous year’s 26 per cent dip.
EY has broken down which uses of artificial intelligence are presenting the most benefits for wealth managers as well as whether it will impact employee headcounts.
