The latest forecast said that although the asset management sector was the strongest financial services sector, certain areas would struggle.
Assets under management were expected to grow by 10.7 per cent this year but the latest forecast has reduced this to seven per cent.
While bond AUM are forecast to rise by 10 per cent and money market AUM by eight per cent, this growth could slow rapidly in 2013/14.
The report said: "As the economy recovers and risk appetite returns, today's safe haven investments are likely to reverse. Flows into bonds and money market funds are expected to slow rapidly or even turn negative as rising yields in the bond market cause capital losses and the equity market gains momentum."

Carl Astorri, senior economic adviser to the Ernst & Young ITEM Club, said: "The asset management sector is still the strongest performing sector in financial services but it will change rapidly in 2013/14.
"Bonds and money markets will lose favour as economic stability increases confidence and property and equities will make a comeback as investors start to look for higher return opportunities."
The report was also dubious about the impact of the joint Treasury/Bank of England 'Funding for Lending Scheme', saying banks could be reluctant to use the scheme for fear of the stigma it could create it in the markets.