- Boston Consulting Group report finds industry advantage moving from performance to distribution and technology
- Growth increasingly concentrated among a small number of scaled players
- AI and tokenization poised to reshape cost structures and competitive dynamics
BOSTON—The basis of competition in asset management is undergoing a structural shift, with firms facing a more demanding growth environment and intensifying pressure on traditional sources of advantage. While global assets under management (AuM) reached $147 trillion in 2025, with more than 80% of industry revenue growth driven by market performance, the real shift lies in how growth is captured, with distribution, scale, and technology determining winners.
These findings are among the conclusions of a new report from Boston Consulting Group (BCG), Global Asset Management Report 2026: An Imperative for Growth, released today.
For more than a decade, rising markets supported industry expansion. That dynamic is now weakening as growth becomes harder to capture, more unevenly distributed, and increasingly dependent on distribution strength and technological capabilities.
“Asset management is entering a new competitive era,” said Renaud Fages, a managing director and partner at BCG and a coauthor of the report. “Performance alone is no longer enough. Firms must compete on distribution, operating model, and their ability to scale technology, particularly AI, to capture growth.”
Scale No Longer Guarantees Advantage
Despite a near tripling of AuM since 2010, industry profit margins have remained broadly flat at around 30%. Revenues have grown more slowly than costs, resulting in negative operating leverage and challenging the traditional assumption that scale automatically improves profitability.
At the same time, growth is becoming more concentrated among a smaller set of players. In US passive funds, the top ten providers have captured more than 90% of net inflows over the past decade, while private markets are also seeing capital flow to fewer, larger firms.
- Growth is increasingly concentrated among leading firms with scale and distribution access
- Revenue growth is decoupling from asset growth as fees decline and product mix shifts
- Traditional economies of scale are being offset by rising technology investment and fee pressure
Together, these trends point to a more competitive environment in which only a subset of firms are positioned to capture disproportionate growth.
Distribution Becomes the Primary Battleground
As product manufacturing becomes more commoditized, control of distribution is emerging as the key determinant of success. Access to platforms, advisors, and institutional channels increasingly dictates which firms capture flows, while shelf space continues to tighten.
This shift reflects a broader change in how capital is allocated, with asset managers needing to embed themselves more deeply in client ecosystems rather than relying on product performance alone.
“Distribution now defines who wins,” said Johannes Burkhardt, a managing director and partner at BCG and a coauthor of the report. “Firms that secure access to capital through platforms and partnerships will have a structural advantage over those that do not.”
AI Redefines the Competitive Frontier
Artificial intelligence is accelerating these shifts by compressing traditional sources of differentiation and enabling new forms of scale. BCG estimates that asset managers could reduce costs by 25% to 35% over the next three to five years. Additional expected benefits include:
- A two- to five-fold increase in research coverage
- A three- to five-fold increase in client coverage per relationship manager
- Faster and more scalable personalization of investment solutions
AI allows firms to scale operations without proportional increases in headcount, fundamentally changing the economics of growth. However, most firms remain in early stages of adoption, focusing on pilots rather than full transformation. Firms that fail to redesign their operating models risk falling behind AI-native competitors that can scale faster and operate more efficiently.
Tokenization Introduces New Competitive Dynamics
Alongside AI, tokenization and digital assets represent an emerging force that could reshape market structure. The value of tokenized real-world assets is projected to reach $14 trillion by 2030 and $55 trillion by 2035, creating new channels for distribution, ownership, and product design.
These developments could alter how assets are accessed, transferred, and managed, potentially weakening traditional advantages tied to scale and distribution while enabling new entrants to compete.
A More Demanding Growth Environment
As market-driven growth gives way to competition-driven growth, asset managers face a more complex and less forgiving landscape. Capturing net inflows, building scalable distribution, and embedding technology into core operations will determine which firms succeed.
“The industry’s growth model is changing fundamentally,” said Fages. “Firms that adapt to this new reality will capture a disproportionate share of future growth.”
Download the report (three chapters) here:
- An Imperative for Growth
- Distribution is the New Source of Advantage in Asset Management
- Rebuilding Asset Management for an AI-First World
Media contact:
Bruce Wraight
wraight.bruce@bcg.com