The power of fund payments, or retrocessions, to distributors and the ability of these payments to alter the fund market is reflected in an annual brand survey of European fund selectors.
Vanguard, one of the largest providers of low-cost funds, has moved significantly up the Fund Buyer Focus survey in the UK and Netherlands – countries where the most action to scrap payments to fund selectors has been taken.
In the UK, Vanguard leapt from 42nd place last year to 25th this year in the research, which ranks cross-border fund providers’ brand strength among professional third-party distributors.
In the Netherlands, Vanguard’s brand has moved to 7th place, an improvement of eight positions from 15th last year.
In Italy, however, where rebates are still common, Vanguard’s brand remains weak. It dropped 18 places to 74.
Diana Mackay, the chief executive of MackayWilliams, which produces the report, says: “Vanguard’s brand position in the various European markets clearly highlights the impact of regulation on adviser retrocessions. Vanguard does not pay commissions and historically this has limited its access to many of Europe’s markets.”
Referring to the Retail Distribution Review (RDR), which ended retrocessions paid to independent financial advisers in the UK, Mackay adds: “RDR-type regulation has opened the doors for Vanguard and points to considerable future opportunity, and this particular regulatory fire burns across Europe.”
On a pan-Europe basis, Vanguard’s brand came in 39th position. It ranked 41 last year.
Among other developments found in the brand report, BlackRock has been toppled from first place in the UK by Schroders, and in France DNCA Finance did the same to Carmignac Gestion. BlackRock is now placed 4th in the UK and Carmignac is now place 2nd in France.
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