Executive summary The institutional asset management industry has become an important feature of modern financial markets, with the scale of this business's importance readily apparent from the size of assets under management by different types of institutional asset managers. With asset management involving a delegation process, shaping appropriate incentive structures is essential for aligning the incentives of owners of funds with those of the institutional managers of these funds. Furthermore, because the industry is still regarded as an evolving business, its strong recent growth is expected to continue well into the foreseeable future. As a result, structural changes in the industry, to the extent that they affect asset managers' incentives, are likely to have their effect on their decision-making and, possibly, market outcomes. Ongoing industry trends have therefore an obvious potential to change institutional investor behaviour in ways that can be important for global financial markets. Central banks have, for various reasons, a long tradition of analysing financial market developments and, given their responsibilities with regard to financial stability, are essentially charged with promoting the development and maintenance of robust financial systems. Based on this set of responsibilities and against the background of the industry's increasing importance, the Committee on the Global Financial System (CGFS), which monitors the stability of global financial markets for the G-10 governors, initiated a Working Group on Incentive Structures in Institutional Asset Management. The Group was asked to gather information about the evolving structure of the asset management industry and possible implications of ongoing industry trends for the financial markets. This report documents the Group's findings, based on the available research and two rounds of interviews with more than 100 industry practitioners from 14 countries.