Banks suffer as wealthy change their tactics
The largest banks have suffered a collapse in their share of fund sales to the wealthy following a lift in business levels since the slump bottomed in March.
The trend, partly resulting from mistrust of banks, has provided internal impetus to decisions to sell their asset management divisions, on top of determination to rebuild capital ratios.
Data provider Lipper FMI said sales of funds outside the money market sector surged to €108bn ($160.8bn) in the six months to the start of September. The last time higher sales were registered was 2005, when they were nearly €170bn.
Deutsche, Barclays, JP Morgan and KBC were the four banks in the top 10 this year. The top seller was Carmignac of France, which sold €10.3bn.
In the 2005 six-month period, a big bank occupied nine out of 10 slots, although Diana Mackay, co-chief executive of Lipper FMI, added managers owned by banks sometimes enjoyed operational independence. The only manager in the top 10 not owned by a bank was French insurer Axa. The top rated, Crédit Agricole, captured €12.4bn.
Data supplied by Lipper FMI showed banks had a 60% market share in 2005. This compares with 42% in the latest 2009 six-month period.
As well as lack of trust, leading to the launch of independent advisers, clients failed to buy as much from banks because of a slump in structured products sales. Some banks are less proactive in pushing funds because they secure handsome spreads on cash left on deposit. A few have reviewed their distribution list, cutting down the number of managers on their distribution platforms, to avoid being accused of promoting poor-quality managers.
Wealth advisers are less keen on promoting in-house products than in the past, particularly when their managers have generated sub-par performance.
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