Europe-wide debate over distributors’ strategic role
Wohanka: ‘links can be dangerous’
Arguments rage over the level of separation between manufacturing and distribution for investment products. Paula Garrido reports from Luxembourg
The strategic role of distributors in marketing investment products has become the topic of debate at European fund industry forums, previously concerned with regulations, directives and back office detail.
Calling for a total separation of manufacturing from distribution, Richard Wohanka, CEO of E80bn Belgo-Dutch fund house Fortis Investments told the annual Alfi/Nicsa meeting in Luxembourg that the European fund industry is in need of “purification”.
According to Mr Wohanka the industry should focus exclusively on asset management and be autonomous, “because any links can be dangerous”.
Ironically, when Mr Wohanka took over the top job in November 2001, his emphasis was on manufacturing products to be distributed by the rest of the Fortis group, including the retail bank, private bank and insurance company. But he also laid down a minimum target of 35 per cent external clients.
In Holland, Fortis Bank is slowly beginning to sell external products, and Fortis Investments is gradually adjusting its business model to move away from being the bank’s exclusive provider. But insiders admit the relationship between bank and asset manager remains tight.
“The quality of advice given by distributors is an issue,” said Wolfgang Mansfeld, president of European funds association Fefsi and board member of Germany’s Union Asset Management. “We need to do something in this area and we need the regulators to help.” But Oliver Behrens, managing director and head of institutional business in Germany for Deutsche Asset Management/DWS warned against excessive regulation, which could lead to distributors selling more investment banking certificates rather than mutual funds.
“We are competitors, but we should not forget there are other industries, like the certificates sector, that are very flexible,” said Mr Behrens. “If we overregulate the funds industry, we are moving ourselves out of the market.”
Germany’s funds industry association, the BVI, has recently been running a vigorous campaign pointing out the dangers of investing in certificates.
Wohanka: ‘links can be dangerous’
