The markets, and thus asset management industry AUM, have bounced back dramatically since the financial crisis a decade ago (even when including the recent market volatility). Yet by at least one measure, the financial services industry in what was once the center of the mutual fund industry has not only bounced back; it has shrunk.

Highlighting data from the U.S. Bureau of Labor Statistics, the Boston Business Journal reports that employment in the greater Boston area in financial services (excluding the insurance industry) has fallen seven percent from 2008 to 2017, and "headcount dropoff has been steepest at asset management and related firms." Meanwhile, according to the latest factbook from the Investment Company Institute (ICI), mutual fund industry AUM has risen 95 percent, from $9.62 trillion in 2008 to $18.75 trillion in 2017.

It's not that Beantown is losing jobs overall. Manufacturing is the only other sector in the greater Boston area to see an employment decline from 2008 to 2017, the Journal notes, and total employment in the area is up 12 percent; even insurance employment is up a bit. And, though the paper doesn't offer specific numbers, it does note that "finance and insurance added hundreds of thousands of jobs nationwide" from 2008 to 2017.

Perhaps, as the paper hints, part of this comes from the active-to-passive asset management shift; though two big passive titans, Fidelity and SSgA, call Boston home, their biggest rivals are based elsewhere. Perhaps part of it comes from the rise of fintech and increasing automation. Perhaps, as the Journal notes, "the city's high cost of doing business is another culprit: large firms have expanded in cheaper locales."

Whatever the reason, it seems that Boston is no longer the center of the mutual fund world. So, what is? 

Edited by: Neil Anderson, Managing Editor


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