I have come across this question few times. Below is my response.
In the coming years, the automated investment management industry will become very advanced technologically. For example, artificial intelligence will be applied to investment management service. Only those independent firms that can understand technology better (like our firm QuietGrowth) will be better placed to provide a superior service in the coming years.
So, only those independent firms that get to a considerable scale will have a viable business in the long run.
Certain big asset management firms might outsource these advanced requirements to specialized service providers in automated investment management, but these asset management firms will incur a much higher cost while doing so, making their business not-so-viable.
There is definitely room for two or three independent firms that offer superlative service at a low cost in each of the world regions (for example, three firms in the US, two firms in the UK, two firms in Australia, etc.). We have to see if there is room for more than two or three independent firms in each of the world regions. In coming years, many existing asset management companies and banks will roll out their own versions of automated investment management service. However, they will have their own inherent constraints in providing the best service to the customer. Hence, to satisfy the high customer expectations, there will be a need for at least one independent firm in each of the world regions.
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