Profit margins in the asset management sector could suffer a hit of five to 10 percentage points over the next to to three years as regulatory headwinds blow harder, according to research by Morgan Stanley and Oliver Wyman.

In a blue paper report on wholesale banks and asset managers, entitled Learning to live with less liquidity and published on March 13, the two institutions said asset managers were starting to come under sustained pressure from multiple headwinds for the first time since the crisis.