Asset managers expect it will take four to seven years to recover the assets under management lost during the recession, according to McKinsey & Co.

Profitability will continue to decline, and firms will need to cut expenses by as much as 25% to 40%, the New York management consulting company said in research it released Wednesday. The company said this is more than twice the 10% to 15% cost reductions that asset management firms have budgeted for this year.

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