Mood of the month

Fairly optimistic
The European fund buyers mood index plunged by 4.6 points since the end of May reaching a low of 62.1 points in July. The down turn was mainly to attribute to the fund selectors in UK where the share of pessimistic and very pessimistic climbed to 33.4% since May. On the other hand countries like Spain continued to lead the sunny front with over 90% of optimistic and very optimistic fund buyers, Germany and Netherland followed with 64.4% and 62.1% respectively.

Distributor commentary

For the week ending 31th July 2017
  • “The most important drivers will be: MIFID II and other, related regulation; political factors; and product innovation. Bearing in mind that a lot of UK funds are not in fact based in the UK, I think that demand for safe, secure income products as well as thematic funds will grow over the next few years. Downwards pressure on product cost will also be a major driver of industry change. Actively-managed funds are simply overpriced.”

    Drivers of change
    United Kingdom, Private client portfolios - Discretionary
  • “I think that the potential changes in public-pensions systems will lead to a consequent change in the way that people save. That change, in turn, would be a factor to take into account when considering potential reasons for an increased demand for investment funds. Elsewhere, looking at the product offering, I think that we will see a substantial increase in passive investment, and an increase in the incorporation of robotics technologies into asset management.”

    Drivers of change
    Spain, Independent financial advice / Intermediary services
  • “I think that in the next few years we will see client demand having a greater influence on change in the fund industry. Increasingly, the fund industry – and the savings industry in general – will be driven by the demand on the part of clients for suitable investment solutions. In that regard, I think that social media will have a key role to play in this phenomenon. Another driver will be the present race by active asset managers to come up with investment solutions that cannot easily be replicated by passive vehicles.”

    Drivers of change
    Italy, Private client portfolios - Discretionary
  • “The impact will come from digitalisation, passive management and regulations (MiFID II). The overall result will be that investment firms pay more attention to the end-client and their needs, and are less focused on their profitability. We do not need twelve funds which are doing the same thing, but do need individual bricks to use in a flexible manner. We have one or two specialists per asset class with complementary products to be able to provide the best solutions to our customers.”

    Drivers of change
    France, Private client portfolios - Advisory
  • “For regulation purposes companies like ourselves need to be able to reproduce breakdowns of performance, transactions and portfolio content. I need special software to comply with these reporting regulations, which costs 25,000 euro per year. This is quite a large outlay for a small company like ourselves. If the providers were to provide more support in this area it would definitely allow us to increase out assets under management.”

    Drivers of change
    Netherlands, Independent financial advice / Intermediary services
  • “The digitalisation and the regulatory first. We will have more transparency in the funds I would think, with the fees and so on, I also think that we will see smaller fund houses or boutiques not being able to survive in this environment in the future. We have to consider it twice before we bring in a small boutique since we have to consider how they will do with the regulatory requirements etc. From our side it is very important with the solvency, to look through the funds, so reporting is very important to us.”

    Drivers of change
    Sweden, Insurance - including unit-linked products
  • “The cost factor will steer a lot of investors towards ETFs, which will lower margins. In order to compensate for the cost factor, managed portfolios will be made more widely available. A lot of customers won’t be able to afford financial advice any longer, and banks will not offer advice for investment volumes under a certain size. Therefore, automated strategies or automated managed portfolios will gain in significance. This will give an enormous push to robo-advice.”

    Drivers of change
    Germany, Fund supermarket / Online fund platform

Changes ahoy

21 August 2017
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by Fiona Maciver

Distributors and manufacturers alike continue to grapple with challenges on many fronts in this period of rapid industry transformation. Regulation and pricing still feature heavily in fund buyers’ thoughts on the key drivers of change in their line of business. Despite all this upheaval, European selectors have an appetite to add new talent to their buy lists, and,

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