The future of fund supermarkets 2007 : Market Research Report

The future of fund supermarkets 2007

Published by: Datamonitor

Published: Dec. 26, 2007 - 32 Pages

Overview
Catalyst
Summary
Executive Summary: The global asset market is dominated by the US; The Australian market tends to have a more focused range of fund options; The UK and US markets are dominated by a few large players; In mainland Europe most competitors are retail banks; Fund supermarkets will continue to be an important distribution channel for managed funds in the future; Technological advances are driven by the requirements of advisers; Intermediaries will require dedicated services and enhanced platform capability; Marketing of products ranges will become more crucial as platforms need to differentiate their offerings; Platforms must take steps to address the potential disadvantages of fund supermarkets; The future of supermarkets is bright; The evolution of fund supermarkets into Wraps; Table of Contents; Table of figures; Table of tables; Market Background; The global asset market is dominated by the US; The US dominates the global market for mutual funds; Germany's mutual fund industry is worth USD3,817billion; The mutual fund industry in Spain is worth EUR321 billion; Superannuation funds dominate the Australian market; Distribution dynamics; The Distribution landscape varies dramatically across the markets assessed in this study; US multiple distribution channels have increased competition; 65% of the funds in Spain are distributed through retail banks; In Germany half of all mutual fund assets under management is attributed to retail banks; Australia's biggest banks also dominate the fund supermarket space; The target customer base for fund supermarkets varies across different countries; In the US and Australia fund supermarkets are targeted at an older customer base; The average US fund supermarket customer is middle-aged with an above-average income; The average Australian fund supermarket customer is middle-aged and investing for retirement; In mainland Europe fund supermarkets are targeted at a younger customer base; Spanish fund supermarket clients are at the opposite end of the spectrum; young and technologically savvy; Fund supermarket clients demand control and accessibility; REgulation; In Australia, regulations regarding superannuation are crucial to market development; Australians have benefited from the recent superannuation changes; Individuals aged 60 and over can access their superannuation benefit tax-free; Limitations on concessionally taxed superannuation contributions have changed; Post- tax superannuation contributions are limited to AUD150,000 per annum; The transitional AUD1 million contribution limit served to boost fund inflows; Pan-European regulations have an impact on the development of all distribution channels; Upcoming EU legislation (UCITS directive and MiFID) facilitates market development and enhances consumer protection; MiFID allows fund managers and distributors improved flexibility, but also introduces new obligations; Competitor Focus; The Australian market tends to have a more focused range of fund options; There is a similar range of funds available in all other geographies; The UK and US markets are dominated by a few large players; Then a few small niche players in the UK who either white-label the larger supermarkets or offer their own funds; In mainland Europe most competitors are retail banks; Distribution Dynamics; The main driver of demand for fund supermarkets will continue to be the preferences of advisors; Fund supermarkets will continue to be an important distribution channel for managed funds in the future; The features of the fund supermarkets will evolve to meet advisor needs; Technological advances are driven by the requirements of advisers; The success of fund supermarkets is dependent on the efficiency of this technology; Intermediaries will require dedicated services and enhanced platform capability; Fund ranges through supermarkets will become more complex and diverse; Supermarkets are sustaining their growth by offering access to new fund structures and providing complementary services; Volatility in the markets will result in an increased customer demand for structured and alternative investments; Interest in alternative asset classes is growing; Fund supermarkets are pursuing growth by offering banking services and investing in bricks and mortar; Strategies for choosing funds will continue to grow in sophistication; The cost of funds have fallen across all markets and this trend will continue; Marketing of products ranges will become more crucial as platforms need to differentiate their offerings; Relationships should be built with advisers and other distribution channels; Leading supermarkets in Germany are helping intermediaries to grow their businesses; White labeling of fund supermarkets through third parties is a key way of targeting new customer segments; Direct distribution and value-added services will shape the future development of the fund supermarket sector; Fund managers will continue to rely on direct sales, although supermarkets represent a key element of heir distribution strategies; Platforms must take steps to address the potential disadvantages of fund supermarkets; The future of supermarkets is bright; The evolution of fund supermarkets into Wraps
APPENDIX: Definitions; UCITS; MiFID; Definitions; Asset manager / Asset management company; Bank; Collective Investment Scheme; Exchange-Traded Fund; Fund of funds; Fund supermarket; Hedge fund; Non-retail market; Retail market; Structured products; UCITS; Methodology; Further reading; Ask the analyst; Datamonitor consulting; Disclaimer
List of Tables: Table 1: Total retail assets under management, 2002-2006, USDm; Table 2: Total retail mutual fund assets under management, 2002-2006, USDm; Table 3: Number of funds and number of suppliers hosted by platforms surveyed in all geographies, 2007
List of Figures: Figure 1: The US dominates global retail asset markets; Figure 2: The US mutual funds amounted to USD 9billion in 2006; Figure 3: Fund supermarkets account for a very small proportion of fund assets in Spain today; Figure 4: Retail banks dominated Germany's mutual fund sector in 2006

Abstract

Introduction

The Future of Fund Supermarkets examines developments in international fund supermarket sectors and assesses the distribution channels that are in operation. The report analyzes both the current and possible future trends of the industry.

Scope

Sizes the investment funds market in the US, UK, Spain, France and Germany Reviews relevant legislative developments and their implications for fund distribution through supermarkets. Analyses key development in these international fund supermarket industries

Highlights

Fund supermarkets are a very efficient system to distribute funds through. Generally fund supermarkets have low administration costs, often do advertising and marketing themselves and have large networks of financial planners or bank branches to distribute from Product and service development is influenced by the needs of financial advisors as well as consumers. Fund supermarkets already offer advisers a number of advantages. For instance, they allow them to dedicate more time to getting to know their clients and to understanding their financial goals, by reducing the time spent on transaction processing. Fund managers should look to fund supermarkets as a source of information about client’s investment needs and demands in relation to funds. The financial planning networks associated with fund supermarkets, have firsthand dealings with clients and therefore represent a key resource to fund providers

Reasons to Purchase

Get an overview of the scope of the investment fund market in each of these countries. Understand key current and future market drivers and their implications for fund supermarkets and fund managers. Use our analysis to inform fund marketing and distribution strategies and adapt to changes in the fund supermarket model. .

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The future of fund supermarkets 2007

Table of Contents

Abstract