There’s gold in them thar retirement asset hills.

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And the asset management industry as a whole isn’t doing toobadly, either, with the fund companies that manage participants’retirement assets making up just one slice of a very lucrativepie.

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Just how lucrative? If you ask the Boston Consulting Group(BCG), they’ll tell you that total assets in the industry set a newrecord in 2014, totaling $74 trillion, while profits gained a hefty7 percent to $102 billion.

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But the other tidbit of news from BCG is that, like the rest ofthe economy, the growth was confined to those already on top. Andit’s not due to new asset inflows, either; it’s coming from astrong bull market and returns on assets already in hand.

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However, the money that is new went to the firms doing the bestalready: firms like Vanguard, BlackRock, and Dimensional Fund Advisors (the topthree of the top 10). And those top 10 accounted for 68 percent ofall flows last year. In 2013, they only managed to snare 53percent.

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That means that firms lower down in the heap will be fightingover what’s left—a smaller piece of the pie—which will likelystiffen competition.

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But that’s not all that will keep firms at each others’throats.

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Profitability is mixed, too: although it’s steady at pre-crisislevels, net revenues in basis points is continuing a downwardtrend—making companies continue to keep a tight rein on costmanagement.

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With investors keeping their eyes on fees and fee terms,managers are having to do likewise, particularly since passivemanagement is the choice du jour for investors looking toavoid higher active management fees.

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So the industry is having to think twice about how it prices itsproducts and where it adds fees. That’s going to make it that muchharder for any firm that didn’t already make it into the top10.

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