YOUR PARTNER IN GLOBAL DISTRIBUTION
Evolving fund distribution
As we look towards 2020 due to the rapid evolution in our world both within the financial services and without, we see an ever increasing speed of change. We are used to one or two variables changing at reasonable speed but now we see multiple variables and rapid changes in demography, investor types, products, technology and of course regulation. How can we adapt our model to be flexible and robust for the future?
Junaed Kabir, Global Distribution Executive J. Kabir & Associates; ALFI TA Steering Committee member
ALFI TA & Distribution Forum 2016, Panel discussion: Re-shaping Fund Distribution by 2020
If we look at these changes briefly we find that one tends to push the other. As demography changes in the Western markets the population is more mature and product bias are more within the insurance and pensions area. In emerging markets, the population is younger and therefore the products required for them may not even exist. The investors are getting more service conscious especially in the emerging markets and therefore, answers to their questions need to be immediate and correct.
As we get our products geared to the demographical changes, we need to distribute using technology that meets the requirements of the mature and emerging markets. Every government in Europe is promoting the internet to the older generations from discounts on computer purchases to running courses at adult education centres, so they are more able to navigate the digital world. On the other side we have the smartphone generation, who do not understand why the world does not work totally on Apps on their phone. The thumbprint which used to be the signature of old, has made a total comeback in the digital world as a biometric signature. Let’s not forget the world of alternative asset classes. How do we distribute these classes in the future, without requiring our consumers to be students in Quant and can we please use our thumbprint for the capital calls?
Assuming by 2020 we get our products geared for the new consumers in their medium of preference, will our distribution plans be derailed by legislation? Multiple regulations both at national and regional levels are crisscrossing our distribution vision with some even conflicting each other and others atleast not really protecting the investors, as they are intended to do. Can we influence our legislators to be better at helping us keep our dominance in the distribution of global funds by at least understanding how their legislations may affect us in servicing the needs of our customers in far flung countries?
Massive economies like China and India are already major players in the commodity markets and now they are setting their sights towards the financial markets and especially to the fund market. In the first instance it is to tap into their large domestic markets but also as we have seen in Luxembourg with the opening of multiple Chinese bank branches, it is to tap into the global market. Are they the market disruptors who will take us by storm?