What is the worst case scenario for IM
What do you guys think is the worst case scenario for investment management over the next decade or so? There's a lot of talk about eliminating the capital gains tax, so that cap gains would get taxed at ordinary income rates. Would this completely kill the business model/ bonus prospects at most mutual funds, HF, etc.? I'm guessing that would cause funds to slam the brakes on hiring for a few years?
I suppose a prolonged slump in the markets could have a similar effect. You'd think assets under management should be at a peak right now given that the baby boomers are just starting to retire. I wonder if total AUM will start to decline as the boomers eat into their nest eggs? Any thoughts?
Disclaimer: I don't work in IM, but will be heading back to b-school in the Fall and I'm hoping to break in from consulting.