New global research finds fee compression and legacy systems are locking firms into a spending trap - with implications for Canadian advisors
The business of managing money is becoming less profitable, and the systems that support it are a big part of the reason why.
Profit per assets under management across the global asset management industry has fallen 19 per cent since 2018 and is projected to decline a further 9.1 per cent by 2030, according to PwC's Global AWM & ESG Research Centre.
In research titled Asset Management Infrastructure: Rethinking the Industry's Piping, PwC draws on a global survey of 150 asset managers and 50 infrastructure providers, and concludes that infrastructure - the technology platforms, data systems and third-party services that run behind the scenes - has quietly become one of the most consequential cost drivers in the industry.
"The industry's profits per dollar managed have fallen by almost a fifth, and the bill for the pipes keeps rising," said Roland Kastoun, Global Asset and Wealth Management Advisory Leader at PwC. "The managers who survive the next five years won't be the ones with the flashiest AI, but rather the ones who fixed the so-called boring stuff first."
Spending more to stand still
One of the most striking findings in the report concerns where technology budgets are actually going.
Only 23 per cent of asset managers direct the majority of their technology spending toward building new capabilities. By contrast, 29 per cent allocate more than 70 per cent of their technology budget to maintaining legacy infrastructure - systems that, in many cases, are decades old.
That pattern matters for AI adoption, which has become a central priority across the industry. Some 67 per cent of respondents identify AI and machine learning infrastructure as a top technology investment priority over the next three years. Yet 24 per cent name data fragmentation and poor data quality as the single biggest barrier to scaling AI, and 17 per cent cite legacy systems as the primary obstacle - a direct consequence of underinvestment in foundational modernisation.
As Wealth Professional has reported, the challenge of building AI capability on top of outdated infrastructure is not unique to global firms. Canadian wealth managers are grappling with the same structural tension: the aspiration to adopt AI runs ahead of the data and systems architecture required to support it.
The cost of market data
Among the specific infrastructure layers drawing scrutiny, market data tops the list. Some 58 per cent of asset managers in the PwC survey rank it among the most strategically expensive inputs relative to the value it delivers. Regulatory compliance and reporting systems were cited by 47 per cent, and core technology platforms by 46 per cent.
Fee pressure is compounding those costs. Two-thirds of asset managers say fee compression is already limiting their ability to invest in infrastructure upgrades - a feedback loop in which the pressures that demand modernisation simultaneously erode the resources available to fund it.
OSFI and the Global Risk Institute have separately flagged the need for Canadian financial institutions to modernise legacy systems as part of their AI governance framework released earlier in 2026, a signal that regulators are watching how firms manage the intersection of outdated infrastructure and new technology risk.
How firms are reorganising
Rather than prescribing a single solution, the PwC report identifies four infrastructure models that asset managers are gravitating toward: infrastructure orchestrators, which own core regulated rails and records; specialist modular providers, competing on domain depth; digital and tokenisation platforms, which own connectivity and code; and integrated asset managers, which have begun exporting platforms originally built for internal use.
The blended approach currently dominates. Some 44 per cent of respondents favour a hybrid model - combining capabilities built in-house with purchased and partnered solutions - while 21 per cent mainly buy, 18 per cent prefer to partner, and 13 per cent build entirely in-house. Those numbers suggest most firms are not committing fully to any single direction.
Infrastructure providers are adapting to that ambiguity. Some 35 per cent are evolving into platform or ecosystem partners for asset managers that retain in-house control, while 23 per cent are co-developing proprietary infrastructure with selected clients. From the other side of the table, 70 per cent of infrastructure providers expect to capture a larger share of industry revenues over the next five years.
"Seven in ten infrastructure providers expect to take a bigger slice of the pie, which tells you where the power in this industry is quietly shifting," said Björn Ebert, Financial Services Leader at PwC Luxembourg.
What it means for the advice channel
The implications for Canadian financial advisors are indirect but real. The asset managers, fund companies and custodial platforms on which advisors depend for product, pricing and service are under sustained cost pressure.
When those firms defer infrastructure investment or struggle to modernise data systems, the effects eventually reach the advisor desktop - in the form of slower onboarding, less integrated tools and a narrower range of competitive products.
Wealth Professional has tracked the growing push among Canadian asset managers to replace legacy systems with more agile, modular operating models, a trend that the PwC findings suggest is now a matter of competitive survival rather than optional modernisation.
The PwC report projects that by 2030, 29 per cent of asset managers aim to compete as specialist modular providers and 24 per cent as digital and tokenisation platforms. Hyperscale cloud providers are seen as the primary emerging competitive threat by 68 per cent of infrastructure providers - a sign that the competitive boundary for the industry is shifting well beyond traditional financial services firms.
