Allfunds Bank’s platform, which already has some €280bn of assets under administration, is to launch an ETF service on 1 June.
Users will be able to access ETFs alongside mutual funds via a single point of access, and using existing reporting and custody frameworks, the platform provider said. This also means that additional services will come on stream relating to execution, reporting, information and research on ETFs.
Additionally, Allfunds will offer so-called fractional dealing, which means retail investors will be able to access the market using smaller sums of money. Overall there will be multi-broker access, multi-custodian links and connectivity via equity standards, Allfunds said.
“The new ETF service is fully aligned with the latest regulatory requirements, which guarantee best execution,” Allfunds added.
Agreement for enhanced services has been struck with certain ETF providers to include access to management information, educational programmes and reporting services. The platform said that ETF providers have indicated the rollout of the new services could facilitate greater uptake of ETF products by retail investors. It is also expected that the facilities will encourage takeup of ETFs in the wealth management sector.
Allfunds Bank CEO Juan Alcaraz said: “Allfunds is always working to lead the development of open architecture in the funds industry. We therefore identified the demand and requirements for the distribution of ETFs for financial distributors and ETF providers. Buying an ETF in the stock market is one thing, incorporating ETFs in the wealth management industry’s current distribution framework is a completely different matter. We therefore believe that our ETF service position is unique and brings a new dimension to ETF distribution both for wealth managers and their retail investors”.
Responding to the news, Rodolfo Crespo, senior analyst at Platforum, said: “Allfunds becomes the first platform to support fractional trading of ETFs on a cross-border basis, which is essential for an efficient provision of regular investing solutions and model portfolio rebalancing. This certainly can be a competitive advantage for Allfunds over its institutional platform competitors now that banks and wealth managers across Europe are considering digital propositions to cater for customers whose portfolios are not large enough to be provided with a personalised face-to-face service.”
Access to ETFs via platforms is expected to be driven not only by cost, but by necessity as intermediaries such as wealth managers seek to implement technology solutions that help them deal with regulatory changes, such as the implementation of Mifid II.
Currently, Allfunds Bank’s platform offers access to some 52,000 funds from 540 managers, with its own local presence in Spain, Italy, UK, Chile, UAE, Switzerland, Colombia, Luxembourg and Singapore.