Whilst the proportion of investment funds under management represented by equity funds is still over half, there is a marked long-term decline, confirming a shift towards more outcome-focused products, according to the eleventh Investment Management Association annual survey.

The results of the survey are based on responses to a questionnaire sent to 72 IMA member firms who between them manage £3.9 trillion in the UK.

The survey showed that total funds under management have declined from 89 per cent in 1993 to 52 per cent in 2012.

The IMA said that this was a result of investors diversifying and the "hunt for yield".

While the changes may in part reflect the cyclical nature of markets and the economic cycle, those interviewed identified structural factors with potentially permanent implications for the industry.

“Firms are telling us something increasingly consistent, which is that they expect no return to the equity culture that characterised the 1990s. The market experience of the past decade, dominated by the dot.com crash and the more recent global financial crisis, is likely to have permanent consequences," said Jonathan Lipkin, IMA director of public policy.

“A range of demographic, regulatory and accounting changes are also driving client needs and expectations. Together, these are pushing the industry towards more diversified asset allocation approaches and a greater focus on meeting specific client objectives," Lipkin added.

The IMA said that as a result, some firms in the asset management industry would have to specialise, providing investment components into the market, while others would have to move in the direction of connecting more directly with client needs.

The survey also found that asset managers identified the importance of client trust as a key theme for the industry, with respondents embracing new communication channels and making greater efforts to communicate with institutional and retail investors.

“Building trust is fundamental for the industry if we are to fulfil our role of helping people build resilience to financial adversity and achieve their financial aspirations. It is encouraging to learn that members are investing significant time and resource into their communications and processes to ensure they give the end-investor the information they need in a format they can understand," said Daniel Godfrey, IMA chief executive.