The 10-year plan: How is the future of asset management firms forged?

Building the future of an asset or wealth management business has been made even more complicated by the present’s uncertain market dynamics. How are Chief Operating Officers handling market challenges, product innovations, and new technologies? We catch up with Mike Tumilty, Global Chief Operating Officer at Aegon Asset Management, to find out what’s in the pipeline for them.

Can you give us an overview of what challenges you see on the horizon in the next 10 years?

One of the big challenges is the economics of asset management. Margins are lower and reducing. The costs of running the business are increasing and this results in pressure on the operating model and the total cost of doing business.

There is also a pivot taking place between public and private markets which means you are trying to run a public markets business at a much lower price point to pivot resources, money and effort to building out the private side of things.

What are you working on now to set yourself up for the future?

We’re consolidating the operating model (public markets) on to a global, scalable platform. We’re also working on a coherent and practical data strategy and the rationalisation of vendors (service providers and market data providers).

How do you see technologies like AI or quantum computing impact your business and the industry as a whole?

AI is talked about a lot and we are looking at some use cases, for example an investment research assistant. However, AI doesn’t seem to move at the same pace in financial services as in retail focused businesses, who can leverage AI to help drive or improve customer service and efficiencies. Institutional investors continue to move at a slower pace, which means the use of AI has been less than extensive.

Quantum computing has certainly proliferated asset management more in recent years with the modern fund manager tending to come from more of a mathematics or statistics background with an ability to leverage tools like Python and R to help them do their jobs more effectively.

Beyond technology, we also need to be aware of the resilience side of things, for example the EU AI Act, DORA, FCA’s Ops Resilience initiative etc.

With geopolitical risks heightened, how do you balance your time addressing immediate threats while also investing in future threats?

There are multiple aspects to this, for example the economic situation as experienced today with tariffs, and the conflict situation in Russia/Ukraine, Middle East etc. These also manifest themselves from a continuity perspective. As a business and as a COO, you need a long-term sustainable strategy or business plan and operating model. You need to also rely in info flows from custodians, service providers etc. to help you operate effectively in a connected eco-system.

What are you looking forward to the most at IMpower FundForum?

• Meeting peers to understand their opportunities and challenges.
• Help benchmark where we are versus peers.
• Hear more about the product and regulatory landscape.

Benchmark your operational strategies with 1,500+ global asset and wealth management leaders at IMpower FundForum!