Report on Global Investment Management Cost Survey 2009

The results of the Global Investment Management Cost Survey 2009, carried out by SimCorp StrategyLab, indicate that most investment management firms tend to turn to two very basic tools when it comes to reducing costs; namely cutting the cost of labour by reducing headcount and closing down business lines such as funds and/or other financial products as well as other revenue areas. The prevailing logic in this approach seems to be ‘less activity, less cost’.

Fighting for survival and short-term profit, a turn to these basic tools might seem to be an easy short cut. However, research documents that cost reductions achieved by short-term tactical cost-cutting projects cannot be sustained beyond a 12 months period.  

Furthermore, the new business environment in the investment management industry is dictated by increased competition, tightened regulatory requirements and a sustained pressure on margins, which suggests that a short-term approach to cost management will no longer suffice.

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