Brooklyn Bridge and the downtown Manhattan skyline in New York City

The 2019 outlook for global asset management companies  is stable, reflecting the sector’s ability to integrate technology, address cost structure issues, and adapt to a new service model, says Moody’s Investors Service in a report published Thursday.

The companies have weathered several years of pressure on their profit margins, largely due to the ongoing shift from active to passive management.

“Cost management and technology substitution have preserved operating profit margins per dollar of assets under management (AUM),” says the report.

“Several years pressure on revenue margins has arisen from passive product substitution and competition in a crowded market,” said Neal Epstein, vice president at Moody’s, in a statement. “We’re seeing asset managers shift — along with their advisory channel distributors — to service-centered relationships that are portfolio and fee-based.”

Asset managers will likely engage in mergers and acquistions to “redirect their businesses to areas of greater growth and profitability,” the report says.