Cross-Border Distribution of UCITS

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - 2011

CONTEXT

Graph 3: Total European mutual fund assets under management by distribution channel, 2008–September 2010

100%

28.6

30.5

33.3

80%

60%

40%

71.4

69.5

66.7

20%

Legend

Captive channel Third-party distribution channel

0%

2008

2009

Sept-2010

Source: Cerulli Associates, 2011

Graph 4: Total cross-border mutual fund assets under management by distribution channel, 2008–September 2010

100%

31.9

34.1

45.2

80%

60%

40%

68.1

65.9

54.8

20%

Legend

Captive channel Third-party distribution channel

0%

2008

2009

Sept-2010

Source: Cerulli Associates, 2011

In France, Spain, Switzerland and Italy, open architecture has developed so far mainly via mul- ti-management (funds of funds) through which banks or insurance companies manage fund wraps that include a broad range of in-house products as well as products from the competi- tion. This enables banks to better control the products they distribute (products’ risk/perform- ance ratios, brand) while providing their customers with a broader range of products and with optimised asset allocation. Industry players also consider that this model limits risks related to a totally open architecture model, namely the difficulty and cost of providing appropriate advice for a large range of products and the difficulty to determine responsibilities of asset managers and distributors toward the investor. A May 2011 Cerulli proprietary survey, however, found that some of these “bank-centred” countries may now be ready for opening to new channels in their historical patterns. Indeed, when asked to evaluate the foreseen most important distribution channel for future French as- set management industry growth, survey players reported that IFAs and fund platforms have

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