Retrocessions - A thing of the past?

Article

Retrocessions

A thing of the past?

Ever since the global financial crisis and the European debt crisis, regulators have been scrutinising the financial services sector and implementing legislation to make the industry more transparent and accountable. New regulations that address the asset management business model is no different.

Executive summary

  • Across Europe, retrocessions are likely to be either banned or highly restricted in the next one to three years
  • The traditional advisory business model is at risk, but careful segmentation and new, innovative propositions can help distributors retain their client base 
  • In countries with inducement bans already in place (e.g. the UK), we have seen a significant shift in consumers preferring to go direct
  • In countries without retrocession legislation already in place (e.g., Switzerland), we have seen banks and asset managers take pre-emptive action to reposition themselves ahead of the changes - deciding how to prepare for this shift should be a key priority for each asset manager

Performance issue 13 – January 2014

Performance is a triannual digest, dedicated to investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients. 

Performance issue 13
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