Investment Fund Distribution
How will innovative thinking in fund distribution create a competitive advantage?
Embracing change to gain a competitive advantage
While investment fund assets worldwide had increased to €39.4 trillion at the end of September 2016,1 profitability margins for wealth management firms are still under extreme pressure. In this competitive landscape, the distribution of investment funds is a crucial concern for regulators and market actors alike, particularly in light of four broad trends that are affecting the fund distribution value chain:
- A new generation of investors seeking more personalized services and socially responsible investments, and expecting to be able to use online investment platforms.
- Big data and analytics to help make sense of the huge volume of data and produce both descriptive and predictive analytics on investor behavior, performance measurement, market intelligence, and risk metrics.
- Regulation is still evolving too quickly and, in parallel, RegTech is emerging as a technology-based solution to foster efficiency and automation in the compliance and risk functions.
- New technologies have emerged and are challenging the current operating models (e.g., blockchain, artificial intelligence, machine learning techniques, digital investment platforms, peer-to-peer [P2P] lending, etc.).
Staying one step ahead has become a major challenge, but embracing change could create a competitive advantage. This article does not provide the winning numbers for the next lottery draw, but it does aim to explore certain worthwhile opportunities involving the aforementioned market trends.
Performance magazine issue 24, September 2017
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.