More shelf space for external funds
The trend for third-party fund offerings is growing and providers are finding alternatives to fund supermarkets for reaching customers. Elizabeth Cripps reports.
UK bank Abbey National has just launched a fund supermarket, ABN Amro in the Netherlands is offering third-party funds for the first time and Citibank has signed a deal that adds the Santander Central Hispano Asset Management fund range to its Independent Advice Service platform. Third-party funds, it seems universally agreed, are the way forward. But the straightforward fund supermarket is by no means the only option open to providers, and nor is it always the best one, as the ABN Amro example shows. Abbey National, a familiar name on the UK high street, aims to bring the fund supermarket to the mass affluent with the launch of FundsCentre which will enable customers to run their investments alongside their ordinary bank accounts. The supermarket will be available online, by telephone and post, with Internet access available at 75 Abbey National branches across the UK. According to Ambrose McGinn, director of retail e-commerce at Abbey National, customers will be able to compare and select funds using performance data and commentary from Lipper and Citywire. They will not be offered much in the way of advice, however. “It is execution only,” says Mr McGinn says – although this could change depending on the regulatory framework. Despite the cross-European trend towards fund supermarkets as a tool for financial advisers rather than end clients, FundsCentre is geared towards the end consumer and Abbey National’s 15.5m banking customers in particular. “We want to popularise the whole arena,” says Mr McGinn. “The website is easy to get around and is written in plain English to make it more approachable.” The supermarket offers 280 funds from 24 managers – including Aberdeen, Deutsche, Fidelity, Invesco and Schroders – picked for their big name appeal. “If you go into Sainsbury’s or Tesco’s, you see the brands you know and love,” says Mr McGinn. “So we have taken a leaf out of their book.” Dutch courage Amsterdam-based ABN Amro is becoming the first Dutch bank to offer third-party funds but not on a fund supermarket platform. Instead it will offer 33 products from Robeco, 15 from Fidelity, six from Delta Lloyd and seven and four, respectively, from local firms Ohra and Triodos. The funds will be sold alongside ABN Amro’s products, primarily through its investment adviser network. According to spokesman Geert Pielate, the products are also available – more in the manner of a supermarket – over the Internet or by walking into a branch and demanding, say, a Fidelity fund. But, just as Abbey National targets the mass affluent without advice but realises they must be at least vaguely investment-literate, so ABN Amro goes via its advisers but without underestimating the ability of the end user to make their decision. Mr Pielate says the bank introduced “a new service concept” more than a year ago, a reaction to the new, “more adult” customer who shops from bank to bank and demands, accordingly, a complete range of products. Now, the third-party funds have been picked as complements to the existing ABN Amro products, with Triodos chosen for its focus on green investment and Obra for products including Care, New Energy and Multimedia.
