Some 81% of European mutual fund distributors plan to reorganise internal processes in the next three years to cut costs, according to research firm Cerulli Associates.
Fund consolidation ranked second in the list of measures distributors are considering (61.9%), followed by cutting staff (28.6%).
Although Cerulli Associates highlights that none of the 100 asset managers it polled plans to reduce distribution contracts for cost cutting purposes, 19% say they plan to launch fewer funds or fewer share classes and another 19% say they will negotiate better fees with distributors.
Further down the list of cost cutting measures are mergers and acquisitions, merging business units, reducing marketing expenditure, and selling in fewer markets.
Defined benefit pension schemes were unanimously voted the top client segment to boost the mutual fund asset base, according to the report, “European distribution dynamics 2013: navigating a fragmented marketplace”.
“With the growing defined contribution pensions markets, this will further boost demand from the institutional channel,” says Yoon Ng, associate director and head of European quantitative research.
Institutional investors account for nearly a quarter of the European mutual fund market, accounting to the report.
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