A daunting array of challenges will make life difficult for investment managers this year, but a body representing them is confident that rising wealth in Asia and a resilient regional economy will help lift the industry nonetheless.
In a survey conducted by the Investment Management Association of Singapore (IMAS), 85 per cent of respondents cited China's economic slowdown as their top concern for this year.
This was followed by increasing interest rates in the United States, cited by 60 per cent of respondents, and a weakening of emerging markets, chosen by 53 per cent.
On top of that, the 47 respondents also saw issues such as the rising cost of complying with regulations, increasing competition from other finance hubs and the rise of financial technology as threats to their business over the next three years.
Regulations came up again when they were asked about factors that would have a material impact on their operations in the next three years, with 68 per cent saying increasing regulatory obligations were putting pressure on their companies.
"There's an avalanche of regulatory changes and they're not all local, they're almost all from overseas," noted IMAS chairman Nicholas Hadow. "It's everything from data protection, to anti-bribery, to uses of derivatives. And technology is a subtext to all of this as well, whether it's how we look after customer information, how we use the cloud, and whether we get disrupted by some brilliant new technology."
Financial technology, or fintech, was cited by 41 per cent of the respondents as being a likely driver of investment innovation in the next three years.
However, more among them - 56.5 per cent - felt that having to improve their investment performance and boost their assets under management would be a bigger drivers of innovation in the industry.
Another significant driver of innovation, cited by 46 per cent of respondents, is increasing client demands for innovative products.
But underpinning the industry's long-term strength, Mr Hadow said, is the fact that Singapore remains an oasis of stability and consistency in the region, a factor that cements its standing as an investment management hub in Asia.
"So we think the industry will continue to be resilient, continue to grow this year, despite the obvious headwinds out there from an investment point of view and we think we offer Singapore and global investors a comprehensive and trusted set of services to meet all their needs."
IMAS deputy chairman Gopi Mirchandani added: "We believe that assets in Asia will continue to grow, the growth in Asia from the perspective of GDP (gross domestic product) is one of the strongest in the world. So if you look at the growth of, say, the high-net-worth industry or institutional assets, we think that generally bodes well for the industry as a whole."
