Asset and fund managers are subject to increasingly complex and detailed rules and regulations. In an effort to meet all relevant requirements and afford the cost of compliance, many asset managers have started to seek refuge in each other; they’re entering into partnerships or decide to merge their operations.

Growing competition from other markets

Traditional asset managers are seeing that insurance companies provide asset management activities as well. This comes as no surprise, given that insurance companies have traditionally had access to high amounts of premiums, which they tend to manage and invest themselves. As a result, they’ve gained a wealth of asset management knowledge and experience. Now that margins in the insurance sector are being weighed down, it’s only natural for them to start offering fiduciary management services, thereby engaging in competition with traditional asset managers.

Digital transformation and sustainability

The digital transformation and sustainability are gaining more and more traction in the world of asset and fund management. When making investment decisions, organisations are increasingly looking at sustainability aspects and ESG factors, whether prompted by regulatory requirements or not. The significance of sustainability is also reflected in the types of products companies are manufacturing and offering. This is illustrated, for instance, in the increase in green bonds issuance.

Investing made easy

Thanks to digitalisation and IT solutions, websites and apps are now offering robot investment advice. Asset managers also use algorithm trading. This has opened up the trading market to retail investors, who may want to invest small amounts of money, but are perhaps willing to incur risk. A case in point is the emergence of alternative trading platforms; some are more strictly regulated than others, which has made less regulated trading platforms more popular with retail investors. This is what has happened in the world of cryptocurrencies, for instance.

Changing legislation

The new EU Prospectus Regulation came into effect and the Alternative Investment Fund Managers Directive (AIFMD) was reviewed in July 2019. These developments affect fund managers. New legislation on offering and managing investment bonds is also on the horizon. This may well lead to more institutions requiring a licence. Perhaps you’re not subject to supervision just yet, but you may come to be in the future, which would put you under a licensing obligation.

What BDO can do for you

Whatever challenges you face, your mission as an asset or fund manager is to stay relevant to your clients. To demonstrate that you provide added value, you need to keep up with trends and capitalise on developments in the market. That calls for adaptability. BDO would of course be happy to advise you on the regulatory requirements that apply to your business and help you map out the regulatory developments – and their consequences – that are relevant to your organisation, implement new rules, prepare licence applications and ensure your continuous compliance with statutory requirements.

Want to find out more about BDO’s personalised and pragmatic approach for asset managers and fund managers? Our specialists would be happy to talk to you about your options.