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Brian Chappatta

The Asset Manager Arms Race Has Only Just Begun

It was a banner year for mergers in money management as the continuing fee war squeezes margins. Don’t expect it to slow down in 2021.

Locked and loaded for M&A.

Locked and loaded for M&A.

Photographer: Roberto Schmidt/AFP/Getty Images

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For years, the asset-management industry has braced itself for shocks. In 2018, $369 billion poured out of long-term mutual funds in favor of exchange-traded funds, a record at the time. In 2019, the case for traditional actively managed mutual funds became even harder to make when Charles Schwab Corp. jump-started a race to the bottom among online brokerages by eliminating commissions for ETFs along with U.S. stocks and options.

If those were tremors, 2020 will go down in history as an earthquake.