European accessible assets up 17 per cent to over EUR3.4 trillion, says new Broadridge research
The European market that independent asset managers can realistically address is now estimated to be EUR3.4 trillion – up 17 per cent on 2016 – according to a new study from Broadridge Financial Solutions.
The increase is thanks to a combination of rocketing sales and asset growth, which has been seen in all key European markets.
The top-five markets by accessible assets are the UK, Italy, Switzerland, Germany and France.
The research reveals that European savers maintain very high allocations to cash with only 9 per cent of Eurozone households owning a mutual fund despite compelling reasons to invest in funds at present.
In addition, Europe’s core fund markets exhibit disparate characteristics in terms of product preferences, distribution channels, selector behaviour and – crucially – openness to cross-border products, while Europe’s distribution landscape is moving towards its most important phase of development, a phase that will be characterised by a greater focus on asset managers’ marketing, service and brand characteristics – the key elements of differentiation, rather than simply product.
Usage of sub-advisory arrangements meanwhile, continues to blossom, with core equity or flexible mixed asset strategies the primary areas of activity.
“Europe continues to represent a great opportunity, and regulatory initiatives such as the Capital Markets Union (CMU) and the Pan-European Pension Plan (PEPP) could boost the uptake of third-party funds,” says Mark McFee (pictured), Director of Broadridge EMEA Insights. “But anyone serious about tapping these opportunities needs to understand what is driving change in the distribution landscape as a whole, and what makes each market tick. The markets that appear most attractive on first glance can represent significant challenges too, be it due to a strong bias towards locally domiciled products, for example in the UK, a highly competitive environment in terms of the sheer number of groups present, such as in Germany, or relatively short fund holding periods, as is the case in Italy.”
Much of the analysis in Distribution 360 is based on MackayWilliams’ proprietary ‘accessible assets’ data. The completion of this research follows Broadridge’s recent acquisition of MackayWilliams, which extends Broadridge’s ability to offer clients a combined view of global institutional and retail data analytics with qualitative insights into the global funds industry.