A widely diversified business model in Asia is too costly for most asset managers amid rising costs and competition, argues the consultancy: they must allocate resources better.
Researchers see smaller Chinese life insurance companies following the big players in outsourcing more to external fund managers, including overseas.
Traditional asset managers are competing with alternative specialists to gain new mandates as regional institutions add more of the asset classes to their product mix.
Foreign fund houses' efforts to develop truly local businesses are starting to pay off; nine of the top 20 onshore products in Taiwan by net new flows this year were run by overseas firms.
China AMC ranked top in 2015 by outright profit, and Aegon-Industrial Fund by profit yield, but industry profitability is set to fall amid stricter rules and market volatility, according to new research.
Gatekeepers in Asia are finding space on their crowded shelves for funds that can cope with expected US rate rises, China uncertainty and low oil prices. Alternative products are a big focus.