What's next for funds?
Managing data - a necessity and an opportunity
Investors and fund distributors alike are demanding more data. With standardisation of fund data remaining a key issue, the promise of “big data for funds” seems hard to obtain. This survey-based report, the third in a series produced in association with Funds Europe, asks if this promise will ever be realised. Many products have similar characteristics, but, as of today, the data about them that is given by fund managers to distributors and investors is not standardised.
This survey has revealed that data management at fund companies is an increasingly important function, both for regulatory reasons and to steer distribution efforts. A large number of respondents were concerned that standardisation is hard to achieve. They also indicated a lack of awareness of some of the main initiatives in this area. As owning customer data can itself be a costly matter, it is not difficult to see why many fund manufacturers would be keen to offload their data responsibilities to distributors or service providers.
ETFs and fragmentation
The factors behind the strong growth of Exchange Traded Funds (ETFs), insights into the investor base favouring this asset class, but also the challenges due to a fragmented European ETF market were covered in the latest survey of 124 fund professionals carried out by funds europe in association with Clearstream. The report is the second in the “What’s next for funds?” series launched earlier this year.
As a flexible, transparent and low cost asset class, ETFs have a broad appeal and the majority of survey participants forecast an annual growth rate between 10% and 20% in Europe. The survey has further shown that ETFs are meeting the needs of an increasingly sophisticated investor community including active fund managers using ETFs more and more as part of their portfolio allocation.
Disintermediation and the future of the funds industry
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.