How are investment managers faring in this current market crisis and what are they saying to their customers?
Scrolling through the comments and advice that investment managers and financial advisors are giving currently reveals a broadly consistent message. I’ve looked through the comments and advice from firms based here or selling into the Irish market. The actual wordings in their commentary and advice include:
Stay diversified
Focus on European Fixed Income
Potential for stocks to rise on 12 month basis
Remain invested
Buying opportunity
Temporary decline in markets
The general message is if you don’t have to, this is not the time to sell. Many advisors will cite historic stock market performance, stressing how stocks have typically bounced back and that trying to time the market can be very costly. So the overriding advice is to stay invested.
This market crisis is coming on top of other challenges for the investment management sector, caught between increasing costs on one side (often driven by regulation), and constrained revenues on the other (driven by competition from cheaper investment options). The sector had a tough 2024 and the market meltdown of 2025 just added to the stress
We can see this in the share prices of quoted management groups. At time of writing most stock markets are about 12% off their highs this year. On the same basis, we can see the price performance of several investment management groups.
| Firm | Fall from High |
| M&G | -20% |
| Aberdeen | -24% |
| Schroders | -28% |
| Jupiter | -16% |
| Blackrock | -18% |
The quoted investment management sector has performed significantly worse than the average stock. The sector is clearly a geared play on how markets perform. As markets go up generally, the value of assets under management, and the fees earned thereon, also rise, boosting profitability. This is what makes asset management an attractive business. However when stock markets fall, we see the opposite – lower revenues and fixed costs impacting on margins.
But a bigger risk for the sector is the loss of assets if investors decide to sell. This can mean that as markets bounce back, a firm may have less assets to benefit from on the way up.
Where do we stand at the moment? Well it’s early days, and a prolonged market downturn coupled with a poor economic backdrop is what would unnerve investors most.
But there have been one or two headlines which might cause some stress. In the UK, equity funds suffered their biggest outflows on record in the first quarter of the year with withdrawals of £3.5 billion (CityAM). And Morningstar report that $22 billion was taken out of US funds in the same period. Some fund management groups have also reported net outflows in this first quarter reflecting market volatility and a reset in investment return expectations.
The business performance of investment companies through the market crisis will reflect factors like the mix of business (retail or institutional) and the range of assets they manage. Some business will be quite “sticky”.
A fall in asset values impacts all managers, but for some, the loss of assets is also a threat.
Tradewinds 