He adds: “Ultimately, I do not think it has been brilliant for our industry: it creates fewer jobs, so there is job destruction, leading to a lot more competition for fewer positions.”
But he expects consolidation will slow slightly, “as a lot of the easy ones have been completed”.
Another key feature of future investments will be a move away from passive investing towards active management, according to Mr Wright.
He says: “The last 10 years have been about passives – leading this have been companies like Vanguard and BlackRock – but the next 10 years will be about active.
“At the end of the day, passives go up and down with the market; people are buying them to get the beta of the market, but if the beta of the market is low, people will sell them or their assets will go down.”
However, he says the next 10 or so years will give greater opportunity to houses like Fulcrum, allowing “many of the active managers out there a chance to breathe again”.
He adds: “Some will fail, but some will perform better than the index.”
He says funds that do outperform the index will have a chance to grow and take back some assets from passive providers.
There is and will continue to be a huge demand for responsible investment, says Mr Wright.
He says: “It is niche currently, but with more[of a] voice it will be mainstream in the future.
“For some people, it is a crucial part of their investment selection.”
Similarly, he says diversity and inclusion within the industry continue to improve.
He adds: “But some people are trying to make light green dark green, manipulating things a bit to satisfy a tick-box in a questionnaire rather than actually do the best for the funds.
“Progress has to be natural, otherwise you will have inexperienced, inappropriate people in the job and it becomes a tick-box exercise.”
But the biggest challenge will be navigating future expected returns.
He continues: “It is going to be lower, while the costs of running a client portfolio will undoubtedly be higher.
“The fees are going to be eating a large part of the future expected returns: that is the new paradigm and it is going to put even more pressure on the distributors.”
Victoria Ticha is a features writer at Financial Adviser and FTAdviser.com
