14 November 2017
By Tiziano Giannotti

By Fiona Maciver

After all the blood, sweat, tears and delays, implementation of Mifid 2 is palpably close.

This is Fund Buyer Focus’s last quarterly update on distributors’ perceived drivers of change before the big day and, unsurprisingly, regulation remains at the forefront of minds, followed by pricing and cost. Where the relative importance of the former has remained fairly flat, the latter has trended up in acknowledgment of the consequences of increased transparency. The shifting importance of the current top-five drivers is visualised in the chart on this page. Beyond the top five, other notable shifts over the third quarter include an upswing in mentions of new sector themes as a driver of change, with distributors’ comments covering a wide range of topics including sustainable investing and more specialised funds in some existing sectors. Interestingly, mentions of the macroeconomy as a driver also increased (from around 5% of selector comments over the previous three quarters, to 10% in Q3). This likely reflects increasing rhetoric on inflationary pressures, talk of interest-rate hikes and the tapering of central-bank bond purchases, all of which inevitably have more distributors thinking about the prospect of change. While the chart highlights pan-European trends, drilling down to local markets reveals more nuanced concerns. Markets where a ban on retrocessions has not yet come into force are understandably more focused on regulatory changes than those that have already been subject to such legislation. For example, there was a big upswing in mentions of regulatory change from distributors in Belgium/Luxembourg, Germany and Italy in the latest quarter.