FinecoBank looking to push boundaries of distribution
From its launch in 1999, FinecoBank has been a leader in the distribution of
multi-brand mutual funds through an online platform in Italy.
Open architecture has become the answer to a number of questions facing different participants in Italy’s asset management sector.
Investors’ flight to quality, at a time when market conditions tested fund manager skills, has forced the large banking groups to launch funds platforms featuring top international fund managers.
For long the gatekeepers to the country’s distribution networks, they have had to run open architecture platforms alongside their asset management subsidiaries to retain the loyalty of the banking client base.
Private banks, foundations and independent asset managers handling high-end retail assets, without access to these national distribution networks, have been quick to adopt open architecture as a way of selecting best-in-class fund managers to manage their portfolio mandates and managed accounts.
In practice, how “open” these platforms are depends on a number of factors, including the strategy of the parent group.
Until recently, the funds supermarkets aside, the tendency had been to offer as broad a range of funds as possible, often comprising anything up to 40 funds to cover all possible client demands.
More recently, the trend has been to focus on a smaller number of funds houses. The cost of providing marketing and technical support for such a wide range of funds translates into high structural costs.
The trend now is to have a funds family of about 25 funds or less, closer to the “guided architecture” model.
Both the Generali group and Intesa Sanpaolo have fund platforms of more than 20 funds, but others narrow the choice much further.
Deutsche Bank operates a “narrow architecture” system with eight funds, whose managers are described as “partners”.
Mediolanum, the third largest distribution network in Italy, is the narrowest of them all, operating with six funds houses.
At the other end of the spectrum stands FinecoBank, the most successful funds platform in Italy, offering a broad range of investing, trading, banking and credit services to more than 820,000 accounts, with €35bn in assets.
It claims to be the top “direct bank” in Italy, with one of the largest financial adviser networks (2,300 advisers) operating throughout Italy, as well as being the top online broker in Europe.
In early 1999, Fineco was the first company to offer online stock trading in Italy, and in 2001 it started distributing multi-brand mutual funds through the online platform.
“Since then, it has quickly grown from pioneer to market leader,” says Bruno Pennino (pictured), head of investment solutions, FinecoBank.
Through its multi-market platform, FinecoBank offers more than 4,000 mutual funds from 60 top asset managers, as well as investment certificates and 2,000 ETFs.