Italy’s AcomeA stops rebates through new share class

AcomeA’s decision to bypass traditional distribution networks by launching a new share class for its funds is being seen as a brave move, albeit yet to prove its success.

The Italian retail market for mutual funds last year saw the ­introduction of a new share class without any rebates for the distributor. The share class enables execution-only ­investors to bypass the distribution network mainly controlled by banks, who have long dominated Italy’s fund management sector.

The decision by AcomeA, a ­Milan-based fund manager, with €600m AUM,to launch the new share class for its funds was a brave one, as it risked creating ­problems for the firm’s existing d­istributor relationships. As a new concept, the share class has not met with immediate success from retail clients, but it still has the potential to transform the Italian mutual funds market in the way that the open architecture concept was supposed to.

Despite all the talk, open a­rchitecture still looks like only a marketing buzzword, often resulting in at most ‘narrow architecture’.

Open architecture has been on the market for 15 years, but in Italy only three banks operate on a fully open architecture basis: Fineco (part of the UniCredit group), Fundstore (Banca Ifigest) and IWBank (UBI Banca).

All other banks operate on a more restricted basis, from Monte dei Paschi di Siena (30 fund managers), Allianz Bank Financial Advisors (17) and UniCredit Private Banking (nine), through to BNL, which only offers the products of its parent, BNP Paribas.

Historically, banking groups have dominated the fund management sector by owning the distribution networks and restricting access to their own or affiliated products. One result of this has been to allow the banks to push up the distribution fees. Today, rebates paid by Ucits funds to distributors are the highest in Europe.

The banks also owned captive fund manager subsidiaries, so ­controlling both the man­ufacture and the ­distribution of funds. However, this has resulted in limited and low quality investment solutions.

Rebates are the banks’ main ­priority, having always outweighed other considerations, such as fund performance or product range. The first independent fund manager to gain access to these distribution channels was Milan-based Anima Sgr, which opened the way for other independent fund managers (and from which AcomeA was later born).

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