Asset Managers Face Existential Crisis as Investors Flee to Passive Funds
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Asset managers like T. Rowe Price and Franklin Resources have faced massive outflows of client money, totaling over $600 billion since 2018.
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Investors are shifting to cheaper passive investing strategies offered by giants like BlackRock and Vanguard instead of active mutual funds.
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Fee compression and shrinking revenues are putting immense pressure on mid-tier asset managers that have long coasted on market gains.
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New CEOs are trying to expand beyond legacy active mutual fund businesses into areas like ETFs, alternatives, and private credit.
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But consultants warn the industry decline seems irreversible and another bear market could be a cliff-edge moment where many firms can't recover.