Banks hold a 57% market share in EU fund distribution, according to the European Fund and Asset Management Association (EFAMA) in its latest edition (25 April) of its Market Insights series, titled 'Investment fund distribution channels in Europe'.
Financial advisers ranked second in both Europe and the European Union, with a market share of 14% and 18%, respectively, with their presence particularly strong in Italy (36%) and the UK (33%).
The report provided an analysis of how investment funds are distributed to retail investors across 19 European countries, covering assets totalling €4.4trn. Fund managers who participated in the survey also shared their perspectives on the expected changes in the fund distribution landscape over the next five years.
Fund distribution by financial intermediaries providing advice to clients – encompassing banks, financial advisers, insurers, portfolio managers, and full-service brokers – stood out as the most important distribution channel accounting for 80% of fund assets owned by European retail investors.
Banks hold a significant position in the distribution system, with a market share of 45% in Europe and 57% in the European Union.
This variation is attributed to the higher market share of portfolio managers, full-service brokers, and financial advisers in the UK, which stand at 70% compared to 27% in the EU. Bank market share ranges from 91% in Romania to 9% in the UK.
Insurers had a market share of 7% in Europe and 9% in the European Union. In Norway, France and Slovenia, insurers play a more substantial role in fund distribution, with market shares of 19%, 18% and 17%, respectively.
Open architecture fund platforms, offering access to a diverse array of funds from various fund managers, have a modest market share in Europe and the European Union (10% and 8%, respectively), but they exhibit greater presence in Norway and Sweden, with market shares of 24% and 19%.
Investment funds can be bought by retail investors for retirement savings. Although the pension saving channel represents a modest 7% market share in Europe, its prominence is notable in Denmark (46%), Sweden (43%) and France (22%).
Looking ahead, survey participants anticipate an increase in the market share of open architecture fund platforms and financial advisers over the next five years. Financial technology is expected to be the primary driver of the evolution of the fund distribution landscape.
Bernard Delbecque, senior director at EFAMA said: “The report underscores the pivotal role of fund distribution channels capable of offering guidance, support, and advisory services to retail investors. Ensuring accessibility to these channels without imposing upfront fees is crucial for fostering increased household participation in capital markets.
"Furthermore, the anticipated rise in competition between digital and traditional fund distribution channels is good news, as it will incentivize advice-based distribution channels to evolve, further enhancing user experience and delivering added value.”
