Asset managers may have to restructure their sales teams to adapt to the changing methods of fund selection from wealth managers, advisers and private banks, according to research from The Platforum.
The Platforum has surveyed 50 large distributors, such as networks, national adviser firms and wealth managers, and 200 smaller advice firms with less than £100m in assets.
It found that firms’ “buy lists” - lists of recommended funds that a firm’s investment managers are able to pick from - are shrinking rapidly and currently average approximately 115 funds.
Platforum said this was likely to shrink further, to 50 or 60 funds, as the industry moves “to a world where the ‘new guard’ at HQ are dictating what the ‘old guard’ on the coalface select for their clients”.
A consequence of this concentration is that asset managers may have to change the way they sell their funds, The Platforum said.
“In light of all this, we anticipate that asset managers will seek to restructure their sales teams,” The Platforum said.
“There is a diminishing role for salespeople to play in trying to influence individual advisers at the larger firms.”
The firm said the increased centralisation of the decision-making process on funds, in which it predicts “100 key groups will influence the majority of retail flows across direct and advised channels”, will “present substantial capacity issues to the industry”.
The capacity issues have already started to bite this year, with a significant number of popular funds taking steps to limit inflows, from firms such as First State, Aberdeen, Schroders and Fidelity.
The Platforum said increased amounts of assets in fewer funds would also occur because of a rise in advisers outsourcing to discretionary fund managers.
