Online platforms open up fund range

Group Capitalia, one of the largest banking groups in Italy, relies principally on FinecoBank, its open-architecture online platform, to offer a multi-brand product range to its clients, writes Elisa Trovato. In addition to banking products and online trading, the direct bank managing ?11.5bn offers its affluent and upper affluent customers a selection of over 1,000 funds from 30 fund houses. Investors can work out their asset allocation and fund selection online by themselves. However, the bank’s advisory model, introduced over a year ago, now heavily relies on a network of 1,300 financial advisers or ‘promotori’. “Just a small minority of people are able to make their asset allocation using online instruments,” admitted Edoardo Giorgetti, head of strategy at FinecoBank. Once identified the client’s risk profile through a questionnaire, promotori are able to recommend the right asset allocation and select funds, by using proprietary asset allocation software. They have the option to replace one fund with another having similar characteristics, within the selection of 1,000 funds offered by Fineco, without disrupting the asset allocation, explained Mr Giorgetti. Last year, the success of the multi-brand concept totally re-shaped the composition of funds distributed by Fineco, explained Mr Giorgetti “While in the past the majority of the funds we distributed were Capitalia funds, now in-house funds represent a minority” he said. But this is accepted as an inevitable consequence of the evolution of the market, which is moving towards customer segmentation. “The group counts on Fineco to target the more sophisticated or evolved customers, like the online customers tend to be. As a group, we are getting more from this approach”, said Mr Giorgetti. Capitalia AM, the ?33bn asset management arm of the Capitalia group, employs third-party funds in GPFs and funds of funds, despite not offering a multi-manager business. “The decision to move to open architecture rests with the distributor and not with the manufacturer. In order not to be passive with regards to the phenomenon of open architecture, Capitalia Asset Management has developed and is currently strengthening the activity of fund selection and the ancillary services to offer distributors,” said Alessandro Solina, chief investment officer at the Italian asset management company.