Cerulli sees ‘mild’ hit to fund sales after Mifid II

Research by Cerulli Associates has found that a majority (54%) of cross-border managers believe that sales of funds will not be hit by Mifid II, although close to a third (27%) believe that there could be a slight fall in sales as a result of the implementation of the regime.

A small proportion, 4% of of those surveyed said that sales could fall “significantly”. Similarly, a small proportion, 4%, believe that fund sales could increase slightly.

The figures are contained in the research organisation’s latest report European Distribution Dynamics 2017: Managing Complexity as Opportunities Evolve.

Angelos Gousios, director of European retail research at Cerulli and lead author of the report, said: “It is remarkable that, although Mifid II promises to promote transparency, accountability, and co-operation across the distribution chain and empower end investors, practically no one in the industry believes that it will benefit third-party fund sales, which is the healthier part of the industry.”

Barbara Wall, Cerulli’s Europe managing director, added that there could be additional challenges stemming from Mifid II in the form of difficulty positioning third party funds in front of fund selectors because they may come to prefer fewer players in the market.

“The local interpretations of the regulation will be key, and we may see some backward movement in terms of unifying the European market and allowing managers to form a homogeneous distribution strategy,” she said.

“But asset managers should focus on the positives of the new regulation, such as the opportunity to use the enhanced exchange of data with distributors to gain more clarity with regard to their clients, their investors, and the role their funds play in portfolios.”

Unintended consequences

The effects of Mifid II also needs to be put in context of the ongoing Brexit negotiations between the UK and EU.

Recently, at a speech in Luxembourg, the chairman of the European Securities and Markets Authority, Steven Maijoor, warned of inconsistent application of the regime as a result of the uncertainties sparked by the UK’s exit:

Esma’s Maijoor warns of divergence threat post-Brexit

Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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