MONACO - The issue of defined contribution pension returns has come under scrutiny at the annual Fund Forum event in Monaco.
One asset management chief executive Nicolas Moreau of AXA even referred to a DC “catastrophe” in 20 year’s time, and it came amid what delegates termed only “moderate” product innovation in the industry.
Almost 42% of delegates polled electronically that the inability to provide decent returns on DC plans was the single biggest threat to the global asset management industry in the next five years. The result was a visible surprise.
Angelien Kemna, CEO of ING Investment Management Europe, said she disagreed with the result. “It is certainly the case for us as an asset management industry to design decent products that fit the needs of the individual.
“If you design it nicely, there shouldn’t be a big threat,” she said.
Todd Ruppert, president of T. Rowe Price Global Investment Services, pointed to a “huge wave around the globe” of one-stop retirement products. These demand simplicity and transparency at the client level.
An equally surprising 46% of delegates voted that the pace of innovation was “moderate”.
But Moreau pointed to ETFs CDOs and LDI as examples of new products meeting client needs.
“I think our industry is moving quite fast on a five to ten year basis,” he said.
In other Fund Forum news, delegates were told that the Markets in Financial Instruments Directive (MiFID) could have “disastrous” consequences for pension investment.
At issue are rules limiting equity investment in defined contribution plans, a panel of industry CEOs said.
“Yes, it’s correct and yes, it’s disastrous,” said Kemna of ING IM. She called on European asset management lobbyists to address the issue.
Meanwhile, Moreau (who is the former chairman of FEAM – the Forum of European Asset Managers) floated the idea of a single European regulator to ensure equal implementation across Europe.
Pioneer CEO Sandro Pierri told the conference that the first drafts of the MifId international legislation represented a “missed opportunity”.
“We should definitely press as an industry lobby for a consistent implementation across Europe,” he said.