Regulation is changing the distribution landscape
The distribution of asset management products in Europe has been at the centre of debate since the launch of the Single European Act. Besides ensuring a common framework for financial products across Europe, the concept of sound advice on asset management products has been, and is, a core concern.
The key question is: how can regulators ensure that clients receive quality advice when taking investment decisions?
- Historically, the European regulatory framework (UCITS and MiFID) has favoured further product
competition and fostered the development of better advice for the end consumer
- Recent regulatory developments are however numerous and complex, making it almost impossible to perform thorough impact analysis, thereby increasing the risk of unintended consequences
- Unbundling mutual fund pricing structures to increase transparency, but not doing the same for alternative saving solutions increases the risk of regulatory arbitrage to the detriment of mutual funds
- The resulting fee-based advice might favour banks at the expense of wealth managers and independent financial advisors, which could result in concentration of distribution and lead to less competition, lower quality products, reduced choice and rising costs
- Mitigating these risks goes hand in hand with empowering end consumers in their ability to make informed decisions
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.