Significant challenges for European asset managers – but also some green shoots – were revealed in Platforum’s recently-published European Fund Distribution: Routes to Market report.
Net sales of European-domiciled funds have markedly improved since 2022 but cross-border flows are less buoyant. Investors have favoured the in-house fixed income products from banks and insurers over cross-border funds.
More worryingly, fears of a ban on retrocessions are prompting soul searching over banks’ business models. Should they prioritise in-house investments more, so that fund fees can ultimately replace rebates? Is sub-advisory the way of the future? Or should they diversify into wealth management services – a strategy banks are already pursuing in multiple countries.
This could prove challenging for asset managers and the current strategic partnership model. But a shift could also present opportunities within fund-of-funds or discretionary management services.
As banks target the HNW segment, they may look to liquid alternatives and private asset exposure. And any shift away from retrocession-led distribution benefits non-commission-paying passive investments – opening up opportunities for the major ETF issuers but creating a challenge for purely active managers.
These are just a few of the distribution trends covered in our latest report. Readers can also see the latest fund market and distribution channel sizing for several European countries, alongside insights into other developments like M&A activity and the future of sustainable investing.
We recently published European Fund Distribution: Routes to Market report, and you can download an outline of the report here. For more information, please get in touch.