Many banks now think that a renewed focus on asset management will allow them to replenish their depleted earnings as investment banking income continues to be under pressure from difficult trading markets and uncertain economies. (see
Wunderwaffe Asset Management?) While asset management certainly is a (very) profitable business if managed correctly it is also a business that requires management skills that are not always in abundant supply in many financial service firms. This applies to banking and insurance behemoths but also to small boutiques. While the larger bureaucratic organisations can easilty be stiffled by too much politics, rigid hierarchies and the lack of focus due to a multitude of business lines the smaller firms are not immune to infighting among senior management and often are overly dependent on an autocratic founder or dominant shareholder.
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