Google: Jack of All Trades?
Earlier this week there were reports that Google is expected to establish an asset management branch. The FT writes how this development – which is said to have been on the table for a couple of years – has sparked concern across the financial services industry, especially amongst smaller funds, as Google could swamp the market.
But it seems to me that this threat of competition is the wakeup call the industry needs. Fund managers have earned the trust of investors, but they need to react and modernise to keep up with the market in which they now operate. The FT refers to the PwC report from earlier this year “Asset Management 2020: A Brave New World” which argued that the traditional approaches of the current market leaders could soon be usurped by the likes of Apple, Twitter and Amazon, which have the technology, capacity and reach to be viable players in the asset market.
To maintain their prominence in the market, classic fund managers will need to demonstrate that they are not only staying abreast of fintech trends, but that they also hold the key to “high quality information, market knowledge and a view on that market”. Investors need to recognise that fund managers are the industry specialists and logical choice for asset handling, over Google, the Jack of all trades…master of none?