Report: Global Fund Distribution – the evolution of platform services
Assets supported on fund distribution platforms have continued to grow in Europe, the Asia- Pacific and the US. But what do industry participants understand by the term “fund platform”? Which services do these provide well? And where can these improve the services that they deliver to asset managers, distribution intermediaries and end investors? Funds Europe, in association with Clearstream, surveyed the industry to provide answers to these questions.
Key survey findings include:
- 52% of respondents say they understand a fund platform to be an online service offering fund order routing, settlement, asset servicing and distribution support.
- 85% say that assets supported on fund platforms will increase over the coming three years.
- 52% say fund platforms can deliver most service improvement to asset managers by enhancing support for compliance reporting (e.g. KYC, AML, MiFID II).
- 58% say fund platforms can deliver service improvement to B2B distribution partners by improving compliance data flows across the distribution supply chain.
- The polarisation of views on consolidation of platforms offering third-party fund distribution reflects the competitive dynamics prevailing in the fund platform marketplace.
The survey has furthermore confirmed that distribution parties continue to push for greater choice of investment products and larger geographical coverage supported on fund platforms that they employ – and for these service enhancements to be delivered against more attractive cost structures.
Bernard Tancré, Head of Investment Fund Services at Clearstream stated: “Platforms with sufficient scale, volume and expertise are able to move ahead with large investments in value-added services and competitive end-to-end solutions required to stay relevant in the distribution space.”
A number of recent examples in Europe have shown platform operators using consolidation opportunities to build economies of scale and to extend market and product coverage. In January 2020, Clearstream and UBS agreed on a long-term partnership in the fund distribution segment in which Clearstream has acquired a majority stake in UBS’ fund platform Fondcenter AG.