All change for Italy’s funds industry

The Italian fund management industry is in the grip of continued turmoil, but a change in the tax law has brightened prospects.

The main regret of Marcello Messori, the outgoing president of Italy’s fund management trade body Assogestioni, was in not having resolved the problem that continues to plague the fund management industry to this day – the problematic relationship between the manufacturers and the distributors in Italy.

Fund managers are paying such a large portion of their profits to distributors and fund selectors that some feel the industry is being held to ransom. Last year, it was estimated that fund managers’ distribution costs amounted to €1.4bn, out of a total income from performance fees of €2bn. This is more than 71.4%, though this is down from the 2008 figure of 73.1% – a portion that seems difficult to justify. Taxation is another issue widely blamed by sector professionals for the industry’s poor performance to date.

But for Assogestioni’s new president, Domenico Siniscalco, perhaps the immediate task is to repair the fraught relations between ANASF (the body representing financial advisers) and Assoreti (the body representing the distributors). As one analyst noted, in his former role as a government minister for the economy, Siniscalco blocked on several occasions attempts to create a separate statutory body for the management of ANASF.

Until 2007, this function was in the hands of CONSOB, the financial markets regulator. The function is now devolved to APF, a body responsible for the operational management of financial advisers, but overseen by sister trade bodies involved in financial advisory business, Assoreti, Assogestioni and ABI, the banking trade body.

The ultimate supervisory function remains with CONSOB. The nomination of Siniscalco as the new president of Assogestioni came with strong backers, UniCredit and Intesa Sanpaolo, the two largest banking groups in Italy.


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