Mood of the month

The European fund buyer’s mood index plunged to 60 points in July (from 62 points in June) landing in the neutral zone after being well positioned in the positive area since last year. The downtrend was mainly driven by countries which actually were always characterized by positive view regarding to the local fund industry. Foremost Spain and Belgium/Lux where only 50% and 25% respectively of the interviewed fund buyers declared to be optimistic over the next 12 months.

Distributor commentary

For the week ending 3rd August 2018
  • “MiFID II is changing the business model of commercial banks but it is also pushing people away from a 'DIY' approach to savings and investment and towards products such as funds and other managed savings solutions. In addition, the introduction of costs-disclosure requirements on a product-by-product basis could push a lot of investors towards wealth-management solutions, which have the combined advantage of greater possibilities for optimising cost-management and a MiFID-compliant format.”

    Drivers of change
    Italy, Private client portfolios - Advisory
  • “I expect an increase in competition, especially in the form of self-managed investments or robo-advisors. This will lead to reduced prices, which we are currently preparing for. In relation to all things advisory or robo-advisory, we are researching systematic strategies, algorithmic strategies, etc. As there are more and more robo-advisory and systematic management players, we need more identifying information, more details about their strategies and the formulas they use.”

    Drivers of change
    Switzerland, Private client portfolios - Discretionary
  • “The regulator is trying to fit everyone into a "one size fits all" straight-jacket, which is stifling true innovation. The result of these restrains is that all the products are becoming very alike, and therefore hard to distinguish from one another on anything other than price. This will result on a race to the bottom in price terms, there will be massive reduction in quality which will in turn have negative effects on the whole fund industry. There will be a complete lack of diversity in terms of both fund quality and the types of funds available. The industry as a whole will no longer be seen as an attractive choice for investors.”

    Drivers of change
    United Kingdom, Private client portfolios - Discretionary
  • “Innovative behaviour currently involves thematic funds, which is a general trend in the market and driven by customer needs. Many companies offer very innovative strategies. This is particularly the case of Decalia, a relatively new company that is developing a niche in thematic strategies that I like very much. RobecoSAM and Pictet are also well-known in this domain.”

    Innovative behaviour in fund industry
    Switzerland, Private client portfolios - Discretionary
  • “I would like to see the regulator not be so obsessed with daily pricing. I would like to see the ability to price weekly or monthly, which would mean that one could change the characteristics of your portfolios and the characteristics of the underlying investments without having to worry about price reporting restraints imposed by the regulator. Property for example does not benefit at all from this emphasis on daily pricing. if I choose to sell property it simply cannot be accomplished in one day, so daily pricing of property investments does not in anyway reflect the reality of how a property fund needs to operate.”

    Product innovation requirements
    United Kingdom, Private client portfolios - Discretionary
  • “I think that the most important drivers of change in the fund industry over the next 3 years will be regulations which are getting tougher and tougher without bringing in any form of added value. My guess is that we´re going to witness to a lot of consolidation because the cost of complying to such regulations will be so high that we´ll need enormous volumes in order to be able to cope with it.”

    Drivers of change
    Luxembourg, Insurance - including unit-linked products

The shifting sands of distribution

11 July 2018
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By Fiona Maciver

Six months on from the implementation of Mifid 2 and Priips, Europe’s new distribution landscape is slowly evolving as business models adapt to the regulatory developments. Meanwhile, the blurring of the boundaries between asset managers and distributors continues, with both sides moving into new territories and adopting vertically integrated models, resulting in the emergence of the ‘distributor-manager.

▪ Changes

Translate perception into business.

Fund Buyer Focus offers reporting and consulting services which provide third party retail fund suppliers with detailed information about how the major fund distributors perceive them and how this perception translates into business.

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