What's next for funds?
The findings about open architecture – its benefits for investors and the threat from financial and regulatory pressures - were some of the most eye-catching results from a recent survey of around 200 fund professionals carried out by Funds Europe in association with Clearstream. The report, "Disintermediation and the future of the funds industry", is the first in a series to answer the question, “What’s next for funds?”
The survey comes at an interesting time for the industry. The traditional channels by which investors buy funds, such as banks and financial advisers, are being challenged by new channels, such as online platforms and robo-advisers. At the same time, regulation such as the retail distribution review (RDR) in the UK and the Markets in Financial Instruments Directive (Mifid) in Europe are changing the way by which intermediaries are incentivised to promote investment products.
The survey highlights the dilemma between embracing open architecture and the recognition of its cost. New technology and automation has the potential to make open architecture affordable for distributors and asset managers.