Company Press Release

New York, (May 18, 2011) – Based on the earnings results of publicly-traded asset managers, kasina examined industry operating margins (operating income/revenues) and net margins (net income/revenue). Firm-to-firm variations remain, but overall, the first quarter of 2011 witnessed a slight drop in asset manager margins despite growth in the broad equity market, represented by The Dow Jones Total Stock Market Index. Quarter over quarter, industry operating margins decreased from 31.4% to 30.5%, and net margins decreased from 23.4% to 22.1%.

“Firm profits are slightly off of a three-year high reached in the fourth quarter of 2010,” says Steven Miyao, CEO and Founding Principal. “However, this is consistent with what we saw in the first quarter of 2010, as well, where assets grew, but margins did not keep pace. This year, firm operating margins are down from their fourth quarter peaks despite overall asset growth of over 3%.” Among the large firms Franklin Templeton, Blackrock, and T. Rowe Price showed strong margins, while Pzena and Calamos continue to lead the smaller firms.

The key concern for asset managers is how to sustain strong margins if asset flows eventually reverse course. Asset managers will not be able to count on robust markets for asset growth forever. Key indicators like price-to- earnings (P/E) ratios are at historical fair market values. Boomer decumulation heralds the retirement of 79 million retirees with over $8.5 trillion in investible assets. As the operating environment becomes more challenging for asset managers, figuring out how to do more with less is paramount to success moving forward. kasina maintains that firms should continue to analyze their cost structures to operate efficiently by:

Focusing attention on new product opportunities created by Boomer decumulation

Leveraging the power of the Web, social media, and mobile to distribute cost-effectively

Segmenting distribution efforts to focus the firm’s most valuable resources on high value advisors

About kasina

kasina's commitment to innovating distribution in the financial services and insurance industries has made it one of the most influential strategy consulting firms in its sector. kasina works with a wide variety of clients from five continents, including firms representing 90% of the U.S.'s total assets under management. An overview of services offered by kasina is available at www.kasina.com.