Asset managers start to court Italy’s financial advisers

Gathered at its annual conference in Milan, the Italian asset management industry heard numerous speakers say that financial advisers are the future for the industry, not the banks.

The asset management industry in Italy is going through a difficult phase, says Domenico Siniscalco (pictured), chairman of Assogestioni, the Italian asset management association, in what might be described as an ­understatement.

Speaking at the Salone del Risparmio, the industry’s annual ­conference held in Milan, he said that ­Italy’s household savings rate has been declining over the years, from 16% to 11.5%. The credit crisis can be blamed for many things but not this, as this decline has been in evidence since the year 2000.

The main theme of the event, offered as a solution to the industry’s current predicament, is the role of financial adviser. Banks are widely seen as a drag on the performance of asset management.

‘Legendary’ mess-ups

As Roger Yates, chief executive of ­Pioneer Investments, owned by Gruppo UniCredit, said earlier this year: “The banks’ ability to mess up fund managers is legendary.”

This is reflected in the continued losses captive fund managers have suffered over the past few years, while the financial adviser networks, or the independent fund managers such as Azimut, have fared better.

For too long now, the banks have held the asset management industry hostage, holding the keys to the nation’s distribution networks.

Now that banks have come under increasing pressure from the credit crisis, the idea that banks and the asset management subsidiary worked together to manage the nation’s pool of assets has been exposed as a ­fiction. In difficult times, it seems, when banks are in desperate need to shore up balance sheets, they compete for the assets of their fund manager subsidiaries by offering clients better returns on their bank accounts.

Fund managers, whether Italian or international, have come to realise they need to find a way to break the stranglehold that banks have over distribution.
Among the international fund managers trying to access the Italian funds market, a sense of frustration is growing over their inability to sell their funds. Getting one’s funds accepted onto a bank’s funds platform is one step in the right direction, and an achievement in itself. But to get a real return from the effort involved seems to require a giant stride.

Independence has been a dream for many fund managers working within the embrace of a banking group parent. Over the past few years, a number have set up pure fund management businesses.

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