Posts Tagged “Fund Forum”

The Fund Industry’s future: a key to the retirement time bomb?

May 25, 2020

A view from the investors’ side; an article by Guillaume Prache, EFI -

Guillaume Prache will be speaking at FundForum International 28 June - 2 July 2020 in Monaco

The years to come may well be critical for the fund industry. The 2010 FundForum edition wisely includes interactive sessions between the industry and the end investors (its clients) on key issues such as investment approaches and regulation. We are grateful for this initiative.

Indeed, investment funds do provide a collective solution enabling end investors to diversify their portfolio and to benefit from continuous professional care. The fund industry has made great progress in the recent decades, and the European regulators have helped by creating the standardized pan-European UCITS and improving those with the recent UCITS IV Directive including such key new features as the “KID” (Key Information Document). At the same time, European citizens are likely to rely more and more on their personal investments to fund a longer retirement life;

  • as pay-as-you-go pension systems are reducing their benefits,
  • as defined benefit plans shrink and defined contribution ones (often fund-based) grow,
  • as Solvency II is pushing insurers further away from equity investments (and therefore unfortunately from sustainable long term investment performance),
  • and their clients further into unit-linked products. Read more »

New Directions: Building Trust and Growing Wealth in the New Economy

May 20, 2020

An Article by Suzanne Duncan, IBM Institute for Business Value.

Suzanne Duncan will be speaking at FundForum International 2010; 28 June - 2 July in Monaco

What does the fund management industry have to do to maximize returns in a heightened regulatory environment? To start, the industry must reform some of its core attitudes and practices. The majority of investment providers today have brands that promise to provide manager value, flexibility, stability, and ultimately to focus on the interests of their clients.  In practice, however, the opposite is often true.  IBM’s analysis of more than 2,700 industry participants has found that three quarters (76%) of executives believe they fail to deliver on their brand promises.  This number has grown from (67%) in late 2009 when executives were similarly polled for IBM’s study last year.

This failure to deliver brand promises has further accentuated growing levels of distrust and disconnects between investment providers (asset managers and distributors) and their clients. IBM’s research also has found that a majority of clients (nearly 70%) felt that firms are likely to offer products and services in the firm’s own best interest versus those of their clients. More disturbingly, over 60% of providers also agreed.

What are the implications of these disconnects? Trust gaps between investors and providers are hurting the provider’s bottom line, and taking away from opportunities for future innovation. These disconnects can be closed if firms start paying closer attention to investors’ shifting behaviors, attitudes and needs. IBM’s research has also found that any firm that can deliver what investors truly want will be able to charge a premium of 5% above their competitors - a significant opportunity for the industry if it can broaden their definition of innovation to focus on not only product forms - but also client forms of innovation. That is where much of the money will be made. Read more »

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