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Dublin roundtable

28 June 2016


The Irish funds industry has evolved to accommodate a wider range of products and managers. A group of experts discuss the impact of these changes and possible future regulatory developments

                     CLICK HERE TO DOWNLOAD THE ROUNDTABLE IN FULL 

PARTICIPANTS:

  • Tara Doyle, partner, head of asset management, Matheson
  • Padraig Kenny, managing director Ireland, RBC Investor and Treasury Services
  • Fergus McCarthy, head of UK and Ireland intermediary distribution, BNY Mellon Investment Management
  • Des Fullam, director, Carne Global Financial Services
  • Pat Lardner, CEO, Irish Funds
  • Furio Pietribiasi, managing director, Mediolanum Asset Management

                     

                     CLICK HERE TO DOWNLOAD THE ROUNDTABLE IN FULL

Pat Lardner: Let’s start by talking about  recent changes from a client perspective  – what are you hearing from investors  and how are their preferences changing?

Furio Pietribiasi: In the retail space we should start by distinguishing between the Irish/UK market and continental Europe because there are different distributing models. On the continent it happens mainly through the banks, whereas in Ireland/UK you have a lot of distribution coming through independent financial advisors and brokers.

That said, in general there has been a shift away from government bonds by the traditional buy-and-hold investors towards investment products. If you look at last year, the biggest growth market – southern Europe, particularly in Italy and Spain – had such a low yield environment that bonds were no longer a viable opportunity. 

The days of 6-7% returns with low risk, because they were guaranteed by the state, are over and investors have to engage with professional money managers to seek better returns.

We have seen a huge number of existing and new asset managers increasing cross-border distribution into the European market, pushing their own products and bringing competition to a new and unprecedented level, which is very good for final clients if properly advised.

Lardner: One impact of low interest rates and a search for yield and different returns streams is that there are more multi-asset solutions. How does that manifest itself in the types of solutions that you are being asked to bring to market?

Fergus McCarthy: One of the things that we have seen from a UK perspective post-RDR [Retail Distribution Review] is that unless you have some form of captive distribution, or vertical integration more correctly, fund-of-funds are too expensive for consumers.

Investors are much more aware of the total cost of ownership of a fund, which has led to a move from fund-of-funds towards multi-asset products. 

There is correlation in the pension world as well, where we have seen a significant rise in the number of schemes moving from defined benefit (DB) to defined contribution (DC).

Pietribiasi: While in the UK the main driver behind investors’ decisions currently appear to be cost, in continental Europe it has been risk appetite supporting the growth of multiassets strategies, due more to the fact that people are scared about volatility.

Investors are looking for outcomeoriented solutions and there is a greater focus on dividends – the growth of products paying dividends is massive. All the best-selling funds have been driven by the concept of dividends because investors with significant savings need their money to generate an income on a regular basis.


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