Don't ignore low-cost platforms, fund firms warned

Global marketsAsset managers have been warned not to ignore the customers of low-cost, direct-to-consumer fund platforms. These customers, who are typically young and tech-savvy, are the high-net-worth investors of the future, says Angelos Gousios, senior analyst at Cerulli Associates, which has researched the market. And these investors are not the only ones using the cheap online platforms. The research found that the platforms also have clients who invest more than £1 million (€1.3 million). "It is risky to assume that the clients of smaller direct-to-consumer platforms are those who cannot afford advice," says Barbara Wall, Europe research director. "Higher-net-worth investors also told us that they are reluctant to pay advisory fees." A survey by Cerulli Associates found 59% of asset managers in the UK have a strategy for selling directly to consumers or to platforms. The proportion in other European markets was significantly lower. The research firm also found that inflows to investment funds from direct-to-consumer channels are rising fast, aided by technological developments and regulatory changes that have forced fund providers to be more transparent about advisory fees. Many online platforms have low-cost passive investment funds such as trackers and exchange-traded funds (ETFs) at their core, presenting a challenge to higher-fee, actively managed funds. ©2014 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.