Each fund management company is divided broadly into three divisions: its investment management team, those involved in sales and marketing, and support functions including operations and administration. This does not mean that every firm will neatly divide up its business in this way, but the division provides a useful model by which to understand an asset manager’s organizational structure. In addition, various elements of this structure can be outsourced to external organizations (third parties). For example, many start-ups and smaller firms outsource operational and governance functions. This chapter provides an overview of these different functions and the roles within them, as well as areas where outsourcing is used.

Approximately 42,000 people are directly employed by asset managers in the UK (IA 2021). A breakdown of these figures shows that operational roles account for half of those employed in the industry, while investment roles account for roughly one quarter of the total (see Table 2.1). The figures provide a useful way to visualize the shape of an asset management business through its staff, despite the composition of larger firms inevitably impacting the overall figures and also bearing in mind that outsourced roles are not included.

The 2008 financial crisis hit employment at UK asset managers, with those directly employed falling from 25,500 in 2007 to 24,000 in 2009, according to surveys by the UK asset managers’ trade body, the Investment Association. Employment has risen each year since. The surveys also suggest that one of the most significant responses to the financial crisis was an increase in staff in compliance and oversight functions, which now stand at 8 per cent of the total, up from a low of 4 per cent in 2010, although the current level looks to be stable, having been reached five years ago. The rise in internal IT appointments continues, however, accounting for 11 per cent of the total five years ago and 14 per cent today (IA 2021).

The European Fund and Asset Management Association (EFAMA) uses the UK figures, together with equivalent information from France and Germany to extrapolate a European total of around 115,000 individuals directly employed by the asset management industry (EFAMA 2021). The European trade body then considers the indirect employment generated by the industry through related services, such as distribution and advice, auditing, custodianship, legal, marketing, research and technology, and estimates that together these firms help create 644,000 full-time jobs.