Asset managers are shifting away from broad product expansion and towards more focused growth strategies, with outsourcing and cost control becoming increasingly important, according to a Northern Trust survey.
The biennial survey of 300 chief executive officers, chief investment officers, operations directors and similar leaders across North America, EMEA and APAC found that the proportion prioritising product expansion had fallen to 47% from 60% in 2024.
At the same time, product reduction rose sharply as a priority, cited by 28% of respondents compared with 5% two years earlier.
Outsourcing is also playing a greater role in managers’ strategies. The proportion planning to achieve priorities by outsourcing non-core activities more than doubled to 39% from 18% in 2024.
Offshoring was the most frequently cited cost-control measure, at 69%, while 42% identified outsourcing non-core activities as a way of controlling costs.
“Asset managers are pursuing growth with greater discipline and a sharper focus on the areas where they can differentiate,” said Ryan Burns, head of asset managers and private markets, Americas, at Northern Trust.
“Rather than pursuing broad-based expansion, firms are directing resources toward investment expertise, client outcomes and distribution, while extending successful strategies through vehicles such as ETFs, semi-liquid funds and collective investment trusts.”
Angelo Calvitto, head of Asia Pacific at Northern Trust, said outsourcing was becoming increasingly important as managers faced cost pressures and rising complexity.
“Managers are doing more with fewer, more strategic partners,” he said. “The goal is not only lower cost, but a more straightforward operating model with stronger control, better quality and the scale to support future growth.”
The survey also found that all respondents were using AI in some capacity, with data accuracy and quality control, document management and research among the leading use cases.
Nearly half identified consolidating data from multiple sources as their biggest data challenge, while sourcing and aggregating investment analytics was the leading challenge for front-office teams.
“AI is moving from experimentation to implementation across the industry,” said Nick Gilbert, head of asset servicing, EMEA, at Northern Trust.
“But its value will depend on the quality, governance and accessibility of the data beneath it. This is not just a technology issue; it is an operating model and resilience issue,” he added.
