Viewed from New York or Tokyo, Europe may look like a single market for investment services. But a closer look – like the exercise Platforum has been running for several years examining the European Fund Distribution Market – makes it quite clear that homogeneity is still a fair way off. Businesses with ambitions to distribute their skills and services in this continent can’t afford to ignore this lesson.
At a European Fund Seminar for Platforum subscribers held in Standard Life’s suite at the top of the City’s Gherkin building, all the speakers illustrated the big differences that still differentiate the separate markets. Our view of the City was unusually clear and sunny. The view of Europe was perhaps more mixed.
Focusing this time on Germany, Austria and UK, the Platforum team identified the opportunities for fund managers aiming to expand their businesses into these markets. Especially striking are the contrasts between Germany and Austria on the one hand and UK on the other.
In Germany banks are major distributors – though they don’t have the dominance they enjoy in the banking heaven of Austria where 9 million inhabitants are serviced by nearly 700 banks. It turns out that there’s a robust German wealth management sector and there seem to be more IFAs than there are in UK.
But on a closer look it seems that German Independents now control a very small percentage of the market and are in fact rather different animals from their UK counterparts. First impressions can be misleading.
The Platforum team had the opportunity to question a range of fund and platform experts from all over Europe and provide the audience with insights into the practicalities of operating in different markets and prospects for the next few years. Inevitably despite continuing contrasts, markets are converging in some respects. The Anglo-Saxon bias in favour of equity investment is gaining some continental traction, as record low interest rates drive bond-loving Belgians and Germans to seek higher returns from riskier asset classes.