From its launch in 1999, FinecoBank has been a leader in the distribution of multi-brand mutual funds through an online platform in Italy.
OPEN ARCHITECTURE SUCCESS
Its success is clear because it has continued to prosper throughout the crisis, taking an ever-larger slice of business from the big banking groups.
For them, the open architecture model can only be a bolt-on feature, added to an already established banking group structure. But for Fineco, the online offering is its key business proposition.
Pennino says: "The growth in assets under our management from 2007 to today has been constant, even through the most difficult times. The main drivers of growth for us have been the diversification of the product offering and the quality of our service, which aims to satisfy the most demanding investor in all market conditions. The flexibility of the platform and our competitive costs have given our customers a high degree of satisfaction."
The strategy positions the bank ahead of a likely trend towards the rationalisation of banking networks in the country over the coming years.
Recent research from the Bank of Italy has shown that Italy is one of the countries in Europe with the highest number of bank branches per population in the continent.
At the end of last year, Italy had 56 bank branches per 100,000 people, while the European average is about 38.
Some countries, such as the Netherlands, the UK, Ireland and Sweden have an average of 22.
Fineco is a subsidiary of UniCredit, one of the two largest banking groups in Italy. Part of this group is Pioneer Investments, with assets of €178bn under management, and a complete global range of funds, from mutual and alternative funds through to capital protection and absolute return funds.
The Pioneer funds make up almost 20% of the funds on the Fineco platform, but Pennino stresses Fineco's independence within the group.
"Pioneer funds may make almost 20% of the funds on offer, but they are treated exactly in the same way as all the other funds.
Our financial advisers are free to sell any funds they like. The remuneration and the budgets are identical for all funds."
Unlike other brokers owned by a banking or insurance group, Fineco is heavily skewed towards third-party funds. Pennino says: "We want to be the most open and free funds platform in Italy."
A report published last year by Assoreti, the national association of financial planner networks, says that Fineco's rivals have an average of 15% of their funds placed by third-party fund managers, compared to Fineco's 80%.
"In Italy, the market for third-party funds represents just a minimum part of the assets placed by financial advisers.
Many companies aim to push their own products to ensure higher margins, often at a disadvantage to the customers," he says.
