RDR cost to EU asset managers between £32m and £76m: Moody’s

RDR cost to EU asset managers between £32m and £76m: Moody’s

The ongoing cost of RDR to asset managers would be between £32m and £76m because of system maintenance, according to a paper by Moody’s.

The 13-page paper looked into developments in European asset managers and how they have been affected by regulatory changes.

It said: “The cost burden associated with regulatory compliance creates barriers to entry for new market participants, and favours lager-scale asset managers.

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“Although large players are likely subject to greater regulatory requirements, they are better positioned relative to smaller peers to absorb the added compliance costs, given their greater financial flexibility.”

The credit rating agency report also estimated that platforms would become the “prime distribution channel” across the EU.

It said RDR has driven “fundamental changes” in asset managers’ distribution strategies.

The report said: “The new regulations place clients, rather than products, at the centre of the investment process.

“Distribution is of strategic important, because a company’s control and influence over its distribution can be as essential as investment performance in attracting and retaining client assets.”

Last year Old Mutual completed the acquisition of Intrinsic and earlier this year Standard Life bought Pearson Jones.

Adviser view

Carl Melvin, director of Renfrewshire-based Affluent Financial Planning, said: “In the UK platforms are already the prime distribution channel.

“The equivalent of RDR will have to be imposed off-shore for that to happen and I hope they will go the way we are going.”