A market under pressure - why asset managers must rethink operating models now
Asset managers in the EMEA region face unprecedented structural challenges that demand a radical overhaul of traditional operating models. This blog delves into how shifting market dynamics, regulatory pressures, and evolving client expectations are reshaping the landscape, urging firms to redefine their strategies for sustainable growth.
The calm before the storm is over
For asset managers across EMEA, 2025 has arrived with a stark reality: the challenges ahead are no longer cyclical—they are structural. Volatile markets. Persistent inflation. Shifting investor behaviour. Rising interest rates. A fractured geopolitical climate. All these trends collided in 2024 to create one of the most complex operating environments in years. While many firms managed to deliver performance on paper, a closer look tells a more sobering story: over 70% of revenue growth last year came not from new client inflows, but from market performance alone. That makes for a very uncertain growth strategy.
The margin squeeze tightens
The long-predicted “fee compression” story has finally come to a head. Clients—both institutional and retail—are demanding more transparency, better reporting, ESG data, and multi-asset capability… all while expecting lower fees. Meanwhile, the cost of doing business continues to rise, fuelled by:
- Multi-jurisdictional regulation (SFDR, PRIIPs, Consumer Duty)
- Increased digital expectations from clients and distributors
- Operational complexity as firms diversify into alternatives
- Escalating technology and talent costs
The result? Many firms are caught in the middle—unable to pass costs on to clients but forced to absorb them just to stay competitive.
A 2024 global operations survey found that margin erosion is now the #1 concern for COOs and CFOs at firms with over £100bn AUM. And the pain is being felt at every tier of the value chain.
Fragmentation is the enemy of agility
These pressures are exposing deep weaknesses in the traditional operating model—most notably, fragmentation.
Asset managers often run on a patchwork of systems and teams stitched together by years of growth, acquisitions, and legacy practices. Data lives in silos. Manual workarounds are routine. Reporting processes are duplicated across regions. And critical operations like fund onboarding, client reporting, and compliance workflows are labour-intensive and error prone.
In short: the infrastructure wasn’t built for what today demands. And it’s starting to break.
From survivors to strategists
What sets future-ready firms apart is not just their ability to survive pressure—but to use it as a catalyst for transformation. Leading firms are rethinking operations, technology, and governance from the ground up. They’re asking bold questions:
- What processes are actually core to delivering value?
- What can be automated, outsourced, or simplified?
- What systems do we need to scale without scaling cost?
Crucially, they understand that operational efficiency is not just a back-office concern. It’s a competitive advantage. Firms that can deliver accurate reports faster, onboard new funds in days (not weeks), and launch products across borders without manual friction will win more business, respond faster to regulation, and build client trust.
Case in point: Turning complexity into confidence
Take the example of a global asset manager with over £700bn in AUM. Facing rising regulatory demands and operational bottlenecks across dozens of markets, they implemented a unified fund data platform (FE fundinfo’s Nexus). The results:
- 60% reduction in manual operational effort
- Faster time-to-market for new products
- Audit-ready compliance in multiple jurisdictions
- This isn’t just a tech upgrade. It’s a transformation in how the business operates.
The strategic shift: From reactive to proactive
In boardrooms across the industry, there’s a shift underway. The winners of the next decade won’t be those who try to weather uncertainty. They’ll be those who redefine their future through bold operational change. That means:
- Making efficiency a board-level priority
- Treating data as infrastructure, not an afterthought
- Consolidating systems and vendors to drive scale
- Automating repetitive work to free up expert capacity
- Embedding compliance into operations, not bolting it on
As one COO recently put it: “We’re no longer talking about cost cutting. We’re talking about structural fitness.”
The bottom line
Markets will stay unpredictable. Fees will stay tight. Regulation will keep evolving. But firms that respond with clarity and confidence—by investing in smarter operations, leaner tech, and trusted partners—will be better positioned not just to survive… but to grow.
Ready to future-proof your firm?
Download our latest whitepaper, Navigating uncertainty: How asset managers are future-proofing through operational efficiency, smarter tech, and strategic consolidation for strategic insights, global data, and a real-world case study of transformation in action.