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LET me make a confession. When it comes to bed-time reading - or for that matter reading material for the beach - you cannot beat Richard and Judy's book recommendations. Yes, I do mean that Richard and Judy - Richard Madeley and Judy Finnigan. Although only a recent convert to our Richard and Judy, I am now hooked on their literary recommendations. Over the past week, I have raced my way through James Bradley's The Resurrectionist and Lloyd Jones's magnificent if somewhat distressing Mister Pip.

Yet, in amongst the James Bradley's and Lloyd Jones's of this world, there is another book that has got me temporarily captivated. Well, it's not really a book, more a juicy reference document. It's the latest tome from that august trade association, the Investment Management Association.

Admittedly, the title is hardly enticing, Asset Management in the UK 2007: the IMA's Sixth Annual Survey, but for anyone with the vaguest of interests in the UK's retail fund management industry - be it financial adviser, financial journalist or investment company - it is an absolute must read. It is also free and can be downloaded in a blink of an eye by visiting www.investmentuk.org.

The key findings should be titillating enough for most people. These indicate that IMA member firms currently manage more than £3 trillion of assets in the UK with more than a fifth of these assets, £770bn, managed on behalf of retail investors. Last year, UK-based asset management firms earnt £10.2bn of revenue and directly employed more than 25,000 people.

As Richard Saunders, the splendid chief executive of the IMA points out: "The UK investment management industry is becoming increasingly sophisticated and international. It is larger than the world's sovereign wealth funds and hedge funds combined." Indeed, the UK now accounts for 34 per cent of assets under management in Europe followed by France, 20 per cent, and Germany, 10 per cent.

Although all 95 pages of the report are worth a read, it is the sections on the funds market and operational issues which I found most riveting. This is because they look at some of the key trends in the UK retail fund management industry and assess a number of key industry issues going forward.

A whole range of facts and figures enthralled me but some grabbed me more than others. For a start, I was reassured by the fact that the funds market remains highly competitive with little evidence showing that mega brands are increasing their hold on the industry, in turn forcing smaller players to vacate the industry.

Although the top 10 fund management groups - the likes of Invesco, Perpetual, Fidelity, M&G and Schroder - account for 45 per cent of funds under management, this percentage has changed little over the past 15 years. The industry still possesses a large number of comparatively small firms, many of them boutiques specialising in particular sectors and not necessarily dependent upon continued asset growth to sustain profits. This is a sign of a healthy, competitive industry, providing retail investors with plenty of product choice - some would say, maybe too much product choice.

The report's confirmation of the increased popularity of both funds of funds, total assets now of £34bn and ethical products, assets of £5.9bn, is also pleasing. Funds of funds in particular have come a long way since the 1980s when most offerings were of a fettered nature.

Innovation in this sector has led to better product offerings for investors. Where the IMA's annual report gets particularly juicy is in looking at the way business is done. According to the IMA's survey, intermediaries accounted for 85 per cent of the industry's sales in 2007, compared with only 6 per cent of business done direct with the private investor.

Is this good or bad? Well, the IMA does not express an opinion, instead leaving it to the survey's contributors to provide their own comments. Diplomatically, it gives a range of opinions. One fund management house - anonymous of course - says the "people that run investments very well are rarely the people who run distribution very well and vice versa". It concludes: "People who become too distribution minded lose their investment edge." Such comment must be music to the ears of leading fund supermarkets such as Hargreaves Lansdown.

Opposing this, another provider laments: "The industry on the manufacturing side failed to find a way to distribute direct to the public and failed to find a way to do their administration properly. We have lost a bit of the value chain and it is our own fault."

My own view is that it is lamentable that the industry has failed to crack the direct market. But I do accept that in channelling most business through intermediaries, the investment industry has had to become more performance oriented for fear of seeing swathes of money moved out of their funds.

Turning to the future, the IMA survey asks contributors for their take. Absolute return funds, it seems, will become increasingly popular provided, and I think this is crucial, the industry designs products that actually deliver positive returns. As one survey contributor pointedly said: "If you want to call it absolute return, then you need to be able to be clear that a consistently positive outcome is a reasonable expectation from your investment process. That is one hurdle I do not think everybody has got their heads around."

All in all, the IMA survey provides an upbeat assessment of the UK's retail fund management industry. Yes, it moans a little about the UK's unfriendly tax environment and regulatory creep but given the awful economic backdrop, the UK fund management industry continues to do remarkably well. It is an industry we should all be proud of, including our beloved Richard and Judy.

Jeff Prestridge is personal finance editor of Financial Mail on Sunday