Europe anticipates effect of RDR, says GSAM’s Nick Phillips

European banks are adapting to the effects of the Retail Distribution Review (RDR) ahead of time, according to Nick Phillips, co-head of European distribution for Goldman Sachs Asset Management.

Businesses and banks across the continent are adopting UK share classes open to them which conform to the RDR, in line with a greater emphasis on transparency.

“European businesses and banks are adopting a fee-based advice model and using the retail share class without any rebate,” Phillips (pictured) said. “Certain banks and institutions are adopting this without the legislation being in place.”

The move by European banks and businesses comes in anticipation of regulatory moves similar to the UK’s RDR coming into effect across different countries in the continent.

Phillips cited Italy, Spain, Holland and Switzerland as exemplary of this phenomenon so far for GSAM, with £26m invested from outside the UK in the firm’s Goldman Sachs N11 Equity Fund in this manner.

“We’ve had examples of clients from Italy, Spain, Holland and Switzerland asking to use our retail share class,” Phillips added. “I would imagine that we are not alone – it is happening from an industry perspective and allows banks and business to give the same share class, therefore the same price, regardless of where they are based.”

“The impact and influence of the RDR is much more far reaching than just across the UK area,” he continued. “Our experience is that demand is increasing – it is very gradual with isolated incidents across Europe but the number using our share class is increasing.”

“This is an industry wide phenomenon and is not isolated in GSAM,” he added.

 

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