Will asset management industry just wither away?

Asset management is a much wider field than purely picking stocks. There's also private equity, private debt, infrastructure, real estate, tc. 

As long as there are institutions or individuals who need to diversify their portfolio, the active equity investing market will be there. Given that the information edge has become hard to get (and highly competitive), a fund or an analyst should possess some form of analytical or strategic advantage to not fall behind. Since the switching cost has become increasingly lower for the clients, the consistent underperformers will be phased out more easily and promptly than in the past. If you are just starting out, it is important to have a long-term view and be cautious if you are entering an overly crowded market (e.g., US large-cap) or joining a shop with a poor long-term track record.

Resonating with the folks who have given their opinion here - Yes, you can expect to have a worthwhile career in asset management. But, be prepared to rub your elbows with the best in the industry. As more dumb money moves out of the market, you are left with the better players competing for the same pie - that is why it gets tougher to first generate and then keep your alpha.

Specialize, network, and be open-minded. And you should be fine. 

Im thinking there will be more actively managed ETF's like Ark Invest than the regular index etf's.  Index ETF's also need to do research to add more companies to their portfolio, especially the infrastructure one.

I believe the industry will begin to value those with coding and statistics knowledge going forward. Quantamental is here to stay.

While I agree in parts with above posters that AM will continue to shrink, I believe there will be an equilibrium between passive and active, and that there will always be a place for active management. Check out Howard Marks' Memo, "Investing Without People."

There are still funds that produce alpha in long only equities. Go look at Dodge and Cox track record for example. The space will just continue to consolidate, and those who aren't producing alpha will lose assets over time until they exit the business

Without active there is no passive. Passive is great but it’s a free rider on the price discovery that active produces. Most likely there will be an equilibrium but it can’t consolidate around only those that provide alpha as it’s a zero sum game. There will continue to be a role for active it will continue to change high fees are dead but active is not.

You will see the industry move in two directions: (i) large benchmark hugging players will continue to consolidate into a small number of multi-trillion dollar players that can offer active funds at sub 10 bps fees which will be attractive to institutional clients who can basically name their fees anyway. And (ii) small scale specialist players who run highly active products that can command higher fees. The guys in the middle, say the manager running USD 300 bn in active money with a large retail base, are likely going to get eaten by the bigger players or left to slowly die. In terms of career, either you love markets and can't imagine doing anything else, or you find something else to do. The people that will survive in this game are people who can't imagine doing anything else and are confident in taking calculated risk. 

active isn't going away.. it's going to hurt equities, but fixed income will be strong. Also you have lots of institutional investors looking at ESG and those funds charge more

The fat is getting trimmed in AM pretty aggressively - in every aspect. Firms are running leaner personnel wise, streamlining operations and broadly divesting from non-core businesses where they can. If you have size, or fortunate to have some profitable segments, you are getting scale to control costs and make your overall business work. I agree with another poster - the middle is, eventually, toast. They will be absorbed, competed away or exist in a weird, ugly limbo. The only way you hold on there is occupy a niche, however you'd like to define that. 

Aside from the literal 'investing' aspect - capex for Asset Managers is through the roof in non-revenue generating areas. HR, Compliance, Technology - they are absorbing more and more dollars than they have in the past, with no end in sight. When many of your strategies are commoditized - you then have to spend more heavily on marketing, which slices even further. Some of this will vary between bank backed, non-bank backed - but the trend is all the same. 

In large part - where you can isolate yourself is by providing 'services' vs. simply products. I would strongly recommend that anyone looking to join a mid sized, long only equity focused fund company think hard about that decision - understanding it may not last long - unless they've got something really, really special that you can then parlay elsewhere. 

If you are looking at fixed income - there's more runway for a variety of reasons. Active will, most likely, be a big player in municipal strategies (tax advantaged stuff) and there's plenty of firms who run insurance money, or similar, that you can get into. High yield, EM, etc. - all still have opportunities to get exposure if that's what interests you. The key here is to make sure you don't end up at a place that has a big emphasis on liquidity only - unless they literally own it. A place like Federated, by example, is heavily slated towards providing liquidity solutions - tough place to be for the next few years. Important, but brutal in a low rate enviornment. The side note here is you are seeing people get out of that business - MMF's closing, etc. as it's just rough. 

Outside of that - institutional wise at least - there's still plenty of opportunities to pursue opportunities at firms that provide 'advice' - think OCIO's where you are basically becoming the CIO of an instutitution, picking managers, allocations, etc. Or in niche areas where you specialize - places like NEAM - in insurance money or have that extra expertise people will pay for. Or, heck, you could go work at the asset owners themselves if they are insourcing - lots of places like that to work at. Alternative managers are also options - HF, PE, VC etc. I think there's still opportunities. 

Some might argue I'm conflating Advisory services with Management... I'd say deal with it. You aren't getting away, on average, with being simply managing another core fixed income strategy. Maybe if you have ancillary services you are selling them - but good luck. It's not just easy money anymore, it's far more commoditized but opportunities exist. 

Will assume you are talking about public equities. No, it's not quite as simple as that. There are the top guys who have done really well / pretty well / are well enough known by retail investors (T Rowe Price / Wellington / Fidelity) who will do well. Then there are boutique shops with top tier performance who will do well. Everyone in the fat middle (JP Morgan) who have low active share & are undifferentiated by hugging the benchmark will be slowly crushed.

The really big guys will be the ones who face the pressure next, how do you expect to outperform over a 10-20yr period with a $100bl fund? The last shops on the block where people still make good money will be the top boutiques who have enough scale for the research expenses but not too big a fund size to hamper performance. The 1st and 3rd guys in paragraph above are less differentiated and more like the Toyotas of the world selling safe, sturdy but not extraordinary cars. Those top boutiques doing deep research with 5-10yr horizons, these guys are the custom building the Ferraris...this will never go out of style