EUROPE - The investment fund arms of Swiss banks UBS and Credit Suisse are more reliant on pension plans than their peers, according to a new report.
Sector Analysis has analysed the European third party fund market by looking at the top 10 providers and found that "there are few clear differences" between them in terms of how they acquire clients.
But it found that UBS and Credit Suisse "both seem reliant on pension plans in a way that is unusual among all the rest of the sample except J P Morgan Fleming". It found that Schroders was most reliant on insurers, while Invesco, Deutsche Bank DWS and Franklin Templeton were the most reliant on intermediaries.
The report says there are no distinctive strategies that mark out the various fund providers. "We've looked, and we can't find them," it says. "The conclusion is that they are similar in all respects," Sector says. "Except one: they each have quite distinct geographical approaches."
“If firms are all the same, in the sense that they are all targeting and feeding off the same customers, this is unsustainable,” says Sector’s Magnus Spence. “And if firms are not making clear choices about which segments of the market to concentrate on, and are spread the whole time across the whole market, this too is unsustainable.
Sector said the firms see the clients by geography, not by type – and blamed the firm’s country heads. “These individuals have too much influence, for reasons that we think are clearly rooted in questionable human resources policies over the years, and in weak central strategies.”
The report, "Case Studies of Third Party Fund Suppliers in Europe", studied the following firms: Fidelity, J P Morgan Fleming, Franklin Templeton, Morgan Stanley, Crédit Suisse, UBS, Deutsche Bank DWS, Merrill Lynch, Invesco and Schroders.
The data was collected from interviews across Europe with 930 financial organisations.