Fund selectors know the world is changing but the need to respond to increasingly complex investor demands will really test asset allocators' abilities in the coming years.
That is according to BBVA’s Spain-based head of quality funds, Belen Blanco, who told Citywire's European publication Citywire Selector that regulation is a big factor in this change, as well as increasing sophistication of both investors and distribution models.
'Open architecture has experienced an exponential growth, market circumstances have become totally different, new products have appeared in the market, MiFID II has changed the legal framework of the asset and wealth management industries.
'On top of that, the new digital ecosystem and the increasing data analysis capabilities have completely changed the way in which third-party funds will probably be distributed in the near future.'
As a consequence, Blanco said the main challenge for fund selectors will be to adapt to these new circumstances and requirements in order to provide clients with the tools they need to monitor their portfolios.
‘We need to be ready for a client who will have to comply with more requirements and thus, will be more and more demanding in terms of data, information, tools and support,’ she added.
The continuation of regulation reforms is something Blanco also said selectors need to adapt to. ‘MiFID II has imposed more requirements for distributors and providers of financial services.
'That has resulted in more requirements for selectors, especially for those such as ourselves, that also act as platforms.
'Now that the requirements of data and information are higher, being prepared to comply with them has certainly taken up some of our time over the last year.'
Blanco said it will also have many implications for the team’s day-to-day job from now on.
‘The good part of it is that it has also forced us to optimize and improve many of our processes and to upgrade our database, which is much more powerful, reliable and flexible now.
'So, all in all we are very happy because we are now much more prepared for the future than before.'