Asset managers are facing a more challenging period as declines in the stock market adversely impact asset management revenues and the ability to attract new funds, according to a research report released Monday by Friedman, Billings, Ramsey & Co. Aside from straight drops in asset values, declines in the securities market can drive asset managers' funds lower, leading to increased redemptions, according to the report.

Legg Mason Inc. is among the asset managers facing the most difficulty because of recent declines in the stock market.

"Legg Mason has had the most trouble quarter-to-date across its managed equity products, slipping 5.2 percent on an asset weighted basis within its funds," FBR analyst Matt Snowling wrote in the research note.

Much of that decline is related to its Value Trust and Opportunity funds, which have a combined $27 billion in assets under management. The funds have declined 6 percent and 9 percent, respectively.

With those continuing struggles, shares of Legg Mason fell $2.86, or 3.5 percent, to $78.35. Shares reached a 52-week low earlier in the trading session, bottoming out at $76.80. Legg Mason shares had traded between $80.86 and $110.17 during the past 12 months.

Franklin Resources Inc. has also struggled in the second quarter as its Templeton Growth and Mutual Shares funds -- which have combined assets of $64 billion -- have each posted losses of more than 6 percent.

Shares of Franklin were down $1.88 at $124.26.

Despite the troubles of a couple of companies in the sector, FBR estimates earnings for asset managers will increase, on average, 1.8 percent for the quarter ending Sept. 30, compared with the prior period.

Federated Investors Inc. should be among the asset managers better suited to current market conditions, as it does not rely on equities markets as much as its competitors. About 74 percent of Federated Investors managed assets reside in market markets.

Shares of Federated Investors declined 60 cents to $35.47.

Elsewhere among asset managers, shares of Janus Capital Group Inc. slipped 62 cents, or 2.3 percent, to $25.92. Shares have traded between $17.62 and $32.13.

T. Rowe Price Group Inc. shares gained 15 cents to $49.46.

Waddell & Reed Financial Inc. shares fell 47 cents, or 2 percent, to $23.33.