M&GDec 5 2016

M&G’s Richards calls for distribution improvements

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M&G’s Richards calls for distribution improvements

Anne Richards has used her first major presentation as chief executive of M&G to stress the funds industry must become “more sophisticated” in the way it distributes its products to customers.

Ms Richards said M&G – part of insurer Prudential – needed to adapt in order to remain profitable in an environment characterised by rising costs and a squeeze on revenues.

The former Aberdeen chief investment officer said at an investor day that the asset manager was considering ways to implement a “digital distribution” strategy, but acknowledged the move was still in the early stages.

“We are thinking about digital distribution, what that means for our business, and lots of conversations going on in that area at the moment, [but] nobody seems to have really cracked it,” Ms Richards said.

“As an industry we have probably underinvested historically in some of the areas that we are now playing catch-up with,” she added, speaking more broadly about technology.

The new chief executive said shifting to a digital strategy was part of a two-pronged approach to adapting the firm’s sales process to the “complex customer channels” it operates in, with the second being a better use of data analysis.

In the summer the firm launched a new direct-to-consumer online service, allowing new and existing direct investors access to lower-cost share classes.

M&G said the platform meant it could reduce fees for direct customers by up to 0.5 percentage points – bringing costs in line with those paid by intermediated clients.