One-third (32.7%) of the funds on German non-independent financial advisers’ buy lists are third-party funds, says a research firm that specialises in global asset management.
This means that third-party fund groups, and foreign groups, “have a realistic chance of successfully marketing their funds to these advisers,” says report author Boston-headquartered Cerulli Associates.
The firm added a note of caution, but encouraged perseverance, saying that such groups “will need some patience to get on the list of preferred partners, but it is possible”.
“Preferred partnerships, with fewer and fewer managers, have replaced the open-architecture system that was previously favoured in Germany,” says Angelos Gousios, director of European retail research at Cerulli and lead author of the report, pictured left.
“For marketing and performance reasons, non-independent financial advisers are willing to put their trust in third-party funds.”
More than half (53.6%) of the non-independent advisers Cerulli and Fonds Professionell surveyed for the report said that they had requested that a specific mutual fund be included on their buy list “between one and five times over the previous year”.
‘Opportunities for asset managers to win business’
The opportunities are there for asset managers eager to win business from these players, Cerulli Associates concludes, although it is rare for an adviser to ask for a fund to be included more than 10 times per year, perhaps because recent regulation has made new-product processes in banks somewhat tedious.
These processes can take up to two years, especially when a relationship to a new asset manager needs to be established. Patience will be crucial for any manager seeking a place on a non-independent financial advisor’s buy list.
However, Gousios warns against over-optimism: “Nearly 10% of respondents have no influence at all over which funds are included in the buy list; they have to deal with what has been selected by another department or person.”
He concludes on a positive note, though, saying “The good news is that the relationships between asset managers and banks, once established, are quite stable.”
The full Cerulli Associates’ Asset Management in Germany 2017 report, is available to read here