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The global asset management sector is on track for a shakeup that could lead to significant industry consolidation by 2025, according to a report published Wednesday from PricewaterhouseCoopers International Ltd. (PwC).

The report, Asset & Wealth Management Revolution: Pressure on profitability, predicts global assets under management will rise to US$145.4 trillion by 2025, but mutual fund fees will fall by 19.4% over the same period, declining from 0.44% in 2017 to 0.36% in 2025.

Additionally, total expense ratios will fall faster than management fees, benefiting investors over the next several years, the report says.

By geography, Europe and Asia will see the biggest declines in fund management fees, the report says.

As well, the rising popularity of passive products will boost competition in that segment, driving their fees lower.

At the same time, the report forecasts a greater shift to ETFs from mutual funds. Specifically, it predicts up to 25% of all mutual funds in developed markets will close by 2025, with the ranks of ETFs continuing to grow.

Ultimately, these forces will likely drive further consolidation in certain developed markets, the report says. Indeed, “up to 20% of firms in developed markets will be eliminated by 2025,” the report estimates.