Abstract
Overview
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
Report 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.
Table of Contents
- Overview
- 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
- 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
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