Steve Young Discusses Asset Management Shift to Direct-to-Consumer Offerings

Citisoft's Steve Young recently published an article on FTSE Global markets discussing rising fee pressure and the asset management trend towards more direct relationships with clients. "Until now, fund groups have shied away from offering direct-to-consumer deals, preferring to sell through financial advisers or platforms," Steve writes. "Consequently, many large producers of funds have less data and intelligence on the actual consumers of their products, compared to that enjoyed in other areas of financial services —ì such as insurance or banking. In the case of asset managers, without direct access to the market and the end consumer, the focus on and insight into customer behaviour is reduced."

"As pressure on fees and therefore margins increase, some investment houses will look to have better, direct links to these consumers. The US giant Vanguard has already taken this approach, with a low fee, direct-to-client offering. Such a move reduces distribution costs and potentially enhances data and analytics to further improve the asset manager's product manufacturing."

For more of Steve's insights on this trend and how it could impact the industry, read the full blog.