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Illustration: Aïda Amer/Axios
New technology is reshaping asset management for a new generation of workers, and most of the industry has not kept pace.
Asset managers are in danger of being left in the cold as individual investors are forced to take control of their retirement savings, and more money shifts to passive strategies.
By the numbers: The value of assets under management (AUM) fell by 4% globally in 2018, to $74.3 trillion from $77.3 trillion, the first significant year-over-year decline since 2008, according to BCG's 2019 global asset management report.
Active management fared particularly poorly, losing $1 trillion in AUM last year, continuing a long-term secular trend.
Between the lines: As people move their money out of actively managed funds, they are being drawn to products that offer high-tech options that provide many of the same services as traditional financial advisers but at a fraction of the cost.
What to watch: China is expected to become the second-largest region for asset management — ahead of continental Europe — and will attract more flows than the U.S. over the next decade, BCG's data shows.
The asset management industry also is undergoing a seismic shift away from traditional active management and towards alternative products, mainly private equity. Boston Consulting Group predicts that by 2023, alternatives will generate almost half of the industry's revenues.
The intrigue: Because private equity and other alternative assets are less liquid than traditional bonds or equities and carry higher barriers to entry, asset managers can continue to charge much higher fees, BCG managing director Lubasha Heredia says.
Illustration: Rebecca Zisser/Axios
Axios' Courtenay Brown writes: China’s vow to stop buying U.S. agricultural goods comes at a dire time for farmers, who have been cutting costs and picking up side-hustles — like hosting pizza nights for agri-tourists — to make ends meet.
Why it matters: Adverse weather conditions, slumping commodity prices and trade wars are threatening farmers' already-dwindling incomes, in the midst of the worst economic downturn for the sector since the 1980s.
What they’re doing: Enter agritourism, which gives paying visitors a look inside farm life — and farmers an extra way to make money.
Some farmers are also looking to cash in on hemp, which is used to make CBD oil, the trendy "wellness" product. The crop’s federal legalization last year opened the doors for farmers to profit from the booming industry — but regulations are still murky.
The bottom line: Agritourism and other side-hustles may stem the pain but aren't likely to make up for losses from slumping exports and too much rain.
Out for delivery. Photo: Issouf Sanogo/AFP/Getty Images
"Amazon but for X country" is increasingly on the horizon, but cash payments are holding them back, Axios' Erica Pandey reports.
The big picture: Serving populations that tend to rely on cash and live in harder-to-reach areas, the online retailers of the developing world are searching for creative ways to grow — and keep the international giants at bay.
Between the lines:
The bottom line: The developing world lags. But it's catching up.