Mutual fund firms with offering these value propositions will have a far easier time attracting business and capturing customers from asset managers slow to adapt. Conversely, a broad array of existing asset managers—including many of the largest mutual fund providers—will struggle to meet investors' demands. Mutual fund shareholders' expectations are uncovering an oversupply of outmoded providers in the industry: mainly those focused on benchmark-hugging portfolios with high fees that consume most of their thin relative returns.

The changing needs and expectations of U.S. mutual fund investors and their counterparts worldwide will reshape the global asset management industry. Between now and 2017, the firms adapting successfully will attract 90% of new industry revenues—within U.S. mutual funds and across the entire industry.