RESHAPING RETAIL FUND DISTRIBUTION

MESSAGE FROM THE AUTHORS

CACEIS

Most industries are evolving constantly, and we hardly notice the incremental change. However, from time to time, industries undergo

a step-change, where the process of gradual evolution is significantly disrupted by outside forces. These disruptive forces, often technological, demographic, regulatory or economic, lead the industry into making a leap forward, to adapt to its new operating environment.

The airline industry provides us with a tangible example of such change. In the nineties, the consensus among airline industry professionals regarding the nascent internet, was that air travellers would increasingly use the web as an information source but would continue to rely on the agency network for booking. However, the state of the airline industry today, having undergone an almost complete disintermediation, is testament to how much an established industry can shift, when disruptive forces drive change. In this paper, we seek to understand the forces acting upon the fund distribution industry, from the younger investors and their expectations in terms of digital solutions, to state-led regulatory measures and personal pension funding requirements. Despite the heavy regulatory burden the fund industry bears, which can stall progression, we believe the speed of change in the fund distribution industry is picking up and will impact all parties, from the asset manager, the distributor and financial advisor, right down to the end-investor. With a clearer understanding of the forces, we can then also look at how best to adapt to the new disrupted environment, using a combination of strategies and tactics to increase participants’likelihood of finding themselves among the fund distribution industry’s winners. CACEIS is proud to partner with PwC Luxembourg in presenting this new study, which is based on original research, including interviews with key fund industry market participants. The objective of our paper is to present our extensive research and to promote discussion among all parties with a stake in fund

distribution. I trust you will find this report both informative and thought provoking and I look forward to the opportunity to discuss its findings with you as we watch the industry evolve.

Joe Saliba CACEIS, Deputy Chief Executive Officer

4