KUALA LUMPUR: Malaysia’s asset management industry is showing a sign of slowing down, amid fundamental shifts that are expected to alter the business landscape in future.
The Institute for Capital Market Research (ICMR) said the shifts include changing demographic trends and investor preferences, the advent of digitalisation, availability of talent, as well as changes in market regulations and structure.
Securities Commission chairman Datuk Syed Zaid Albar said it was crucial for policies to be thoughful, evidence-based and informed by the stakeholders to cultivate a more vibrant and responsive market.
“Cultivating such diversity of insights requires an objective platform where stakeholders can explore ideas and collaborate in advancing the development agenda,” he said after launching ICMR’s first joint-research titled “The Evolving Business of Asset Management: Malaysia’s Perspective”, with the Japanese Nomura Institute of Capital Markets Research (NICMR).
He said the proprietary survey conducted by ICMR provides a comprehensive assessment of major issues faces by asset managers in Malaysia and their level of preparedness in facing the challenges.
“The focus on the asset management industry is timely. Over the last 20 years, the industry has recorded a strong growth with a compound annual rate of 16 per cent.
“However, data from the last five years suggest it might have reached an inflection point with signs pointing to slowing future,” he added.
He said concerns over the growth trajectory were also given impetus as industry shortcomings were increasingly raises by investors and industry players.
ICMR director Datin Azleen Osman Rani said the asset management industry needs to be revitalised with more innovation, given the fast changing economic and financial landscape.
“Our report help us asses the long-term potential for asset management in Malaysia, and what needs to be done to ensure its sustainability towards the future,” she said.
ICMR relied on multi-stakeholder collaborative model that harness the knowledge of its strategic research partner, NICMR, and complemented by the practical insights from regulators, policymakers, industry players as well as academia.
ICMR’s research findings suggested that changing investors’ preferences was rated as the most critical external shift affecting the business of asset managers over the next 12-24 months.
The research also noted 89 per cent of asset managers envisaged that digitalisation would highly impact their business growth in the next 12 months.
ICMR recommended the revitalisation of the industry through facilitating greater diversity in terms of asset classes and geographical markets.
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