Irish Funds Distribution Workshop 24 June 2016 Ken Owens - PwC 2 - - PowerPoint PPT Presentation

Irish Funds Distribution Workshop

24 June 2016 Ken Owens - PwC

2

Introduction

24 June 2016 Ken Owens - PwC

3

4 4

About the IF Distribution Working Groups

• Promote Ireland as a domiciled for internationally distributed

investment funds.​

• Capture and promote key statistics regarding the distribution of

Irish domiciled across the Investment Management community.​

• Ensure Irelands competitive advantages from a Distribution

perspective are understood and marketed from a​

• Service​
• Regulatory ​
• Tax Perspective​
• Identify new ways to facilitate ease of distribution for funds

domiciled and services from Ireland​

• Identify and work to remove any barriers or obstacles to the

successful distribution of Irish funds in all key markets

5 5

Distribution Steering Group Chair – Ken Owens

Working Group Chair 1 Asia James Chew – HSBC 2 Europe Emma Conaty – Maples & Calder 3 Latin America Patrick Coughlan – PwC 4 Switzerland Keith Milne - Metzler Ireland 5 UK Len Sutton – JP Morgan 6 North America Chris Christian – Dechert

Distribution Working Groups

6 6

Distribution – Key outputs

• 2015 Irish Funds Distribution Brochure
• UK – Manager Survey and Roundtable, Platform/IFA engagement
• ngoing
• Europe – Manager Survey and AIFMD Passport Feedback to CBI
• Switzerland – Paper on Distribution
• Asia – Distribution guides for China, Hong Kong, Singapore and

Taiwan, Manager Survey – Distribution brochure in Japanese for Tokyo IF event

• Latin America – Manager survey via video conference

7 7

Top Fund Distribution Markets in 2015

Asia Country No of Registrations 1 Singapore 2,980 2 Hong Kong 1,177 Europe Country No of Registrations 1 Germany 8,220 2 Switzerland 6,823 3 France 6,478 4 Austria 6,476 5 UK 6,058 Americas Country No of Registrations 1 Chile 1,507 2 Peru 743 Africa Country No of Registrations 1 South Africa 196 2 Mauritius 65 Middle East Country No of Registrations 1 Bahrain 576 2 Qatar 127

Source Lipper

8 8

Breakdown of the number of registrations by investment strategy (top 15 strategies)

Source Lipper

9 9

Distribution footprint

Source Lipper

10 10

Source Lipper 2015 2014 2013 United Kingdom 2,128 1,880 1,673 Germany 1,919 1,708 1,577 France 1,728 1,343 1,225 Switzerland 1,568 1,371 1,130 Netherlands 1,459 1,275 1,179 Top 5 markets 8,802 7,577 6,784 Total No. of Registrations 20,147 16,904 14,586

Top 5 markets for the registration of Irish UCITS

Ireland

11 11

Agenda Time Topic

8.30am Opening 8.40am Asia 9.20am Europe 10.00am Ireland 10.30am Latin America 11.00am Coffee break 11.20am North America 12.00pm Switzerland 12.40pm UK 1.20pm Closing remarks 1.30pm Networking lunch

A busy morning ahead!

13 13

Moderator: Panellists:

THE CHANGING LANDSCAPE

ASIAN FUND DISTRIBUTION

Paul Price, Head of Distribution, Morgan Stanley Investment Management Shane O’Donovan, Hong Kong Legal Counsel, Old Mutual Global Investors Shay Lydon, Partner Asset Management Group, Matheson James Chew, Senior Product Manager, HSBC

15 15

Moderator: Panellists:

Perspectives on Evolving Distribution Challenges in Europe

Europe

Lorcan Murphy, Director, Brook Green Capital Keith Saladanha, Head of EMEA Retail Sales Strategy, Blackrock Brian O’Rourke, Head of Manager Selection, Mediolanum Asset Management Sheenagh Gordon Hart, Principal, 2020 Regulatory Consulting Conor Owens, Head of Product & Marketing, Mediolanum International Funds

18 18

Mixed/Multi-Asset Fund Flows Dominate in Europe and Cross- Border

Ytd-3/16 2015

Europe and Cross-Border Fund Net Flows

$401 Billion

• $18 Billion

Equity 14% Bond 11% Mixed 50% Other 25% [CATEGO RY NAME] 38% [CATEGO RY NAME] 16% [CATEGO RY NAME] 9% Other 37%

Source: Strategic Insight Simfund; excludes money market funds, internal fund of funds and fund of hedge funds

20 20

Source: Strategic Insight Simfund

2008 2009 2010 2011 2012 2013 2014 2015 Ytd- 3/16 Asia 18

• 3

12 23 32 17 14 40 20 Europe/Cross-Border 78 52 48 22 33 18 61 80 12 US 176 118 111 115 188 178 229 219 33

• 50

50 100 150 200 250 300 350 400 2008 2009 2010 2011 2012 2013 2014 2015 Mar- 16 Asia 50 63 78 85 131 160 194 237 246 Europe/Cross-Broder 153 248 310 300 371 419 461 513 528 US 536 786 1,005 1,061 1,348 1,699 2,001 2,118 2,171 500 1,000 1,500 2,000 2,500 3,000 3,500

ETF Flows by Region

In $ Billion

Towards the Ninth Consecutive Year of $100+ Billion Flows into ETFs

ETF Assets by Region

In $ Billion

21 21

Smart Beta: U.S. Leading the Way

100 200 300 400 500 600 700 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E

US Europe

Smart Beta Fund AUM by Region

In $ Billion

22 22

Global Alternative Funds

US vs. Non-US Net Flows

In $ Billion

*Non-US data includes Local Europe, Cross-border, and Asia regions only. Source: Strategic Insight Simfund.

100 200 300 400 500 600 2011 2012 2013 2014 2015 Mar'16 US Non-US*

• 10

10 20 30 40 50 60 70 80 90 2011 2012 2013 2014 2015 Ytd-3/16 US Non-US*

US vs. Non-US Assets

In $ Billion

23 23 AuM Net Flows Rank Fund Name Manager Objective Launch Mar'16 Ytd-3/16 1 Old Mutual Global Equity Abs Return Old Mutual Group Alt - Market Neutral Jun-09 6.7 1.3 2 DNCA Invest Miuri Dnca Finance Alt - Market Neutral Dec-11 3.1 1.1 3 Schroder ISF European Alpha Abs Return Schroders Alt - Long/Short - Europe Feb-14 1.6 1.0 4 InRIS UCITS PLC-R Parus Innocap Alt - Long/Short - Global Jul-13 1.4 0.7 5 Amundi Fds Absolute Volatility Euro Equity Amundi Alt - Volatility Nov-06 1.8 0.7 6 Henderson Gartmore UK Abs Return Henderson Alt - Global Macro Mar-05 4.7 0.7 7 Nordea1 Stable Equity Long/Short Nordea Alt - Long/Short - Global Oct-12 1.3 0.6 8 Henderson UK Absolute Return Henderson Alt - Long/Short - UK Apr-09 1.9 0.5 9 BNY Mellon Absolute Return Equity BNY Mellon Alt - Long/Short - Europe Jan-11 3.1 0.4 10 PTR-Diversified Alpha Pictet Alt - Multistrategy May-14 1.6 0.4 11 Eurizon EasyFund Flexible Multistrategy Intesa Sanpaolo Alt - Multistrategy Jan-16 0.4 0.4 12 UBS (Irl) Inv Sel - Equity Opp L/S UBS Alt - Long/Short - Global Oct-10 0.9 0.4 13 Candriam Bonds Credit Opportunities Candriam Alt - Credit/Debt Aug-02 1.3 0.4 14 Amundi Fds Absolute Volatility World Equity Amundi Alt - Volatility Nov-07 1.1 0.4 15 UniAbsErtragnet Union Investment Alt - Multistrategy Apr-15 1.1 0.4 Total Above 32.0 9.3

Top-Selling Alternative UCITS Funds

Ranked by Ytd-3/16 Net Flows

In $ Billion

Source: Strategic Insight Simfund; excludes money market funds, internal fund of funds and fund of hedge funds

25 25

Moderator: Panellists:

Update on Distribution in Ireland

Ireland

Eunice Dreelan, Head of Portfolio Management, Irish Life Diarmuid Kelly, CEO, PIBA Munro O’Dwyer, Director – Tax, PwC

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Moderator: Panellists:

Latin America Showcase Event

Distribution in Latin America

Liam Collins, Partner, Matheson Noel Ford, Independent Director, Governance Ireland Patrick Coughlan, Manager, PwC

28 28

Introduction

• Market Overview
• Opportunities for Irish funds
• Regulatory changes
• Potential Obstacles

29 29

Market Overview

• Seventh largest economy
• Eight largest asset management industry
• 2.8% of worldwide investment fund assets
• As at April 2016

– domestic funds AUM €800 billion – 14,482 funds

• Over 500 managers
• Rapidly expanding upper and middle class

– Middle class – 37.6% to 56% (2003 to 2013) – Upper class – 7.7% to 13.1% (2003 to 2013) – LatAm – highest concentration of HNW individuals

• $17.3 billion FDI into Brazil in 2015

30 30

Expected growth for Latin America

31 31

Opportunities for Irish Funds

• Post 2008 – investors move from unregulated to regulated

product

• Brazil regulatory changes
• Managers seeking increased regional and sector diversification
• Political uncertainty domestically
• Underperforming economy

32 32

Regulatory Changes

• CVM Resolution 555
• Relaxes rules on foreign investment
• Facilitates investment in UCITS
• Qualified or Professional investor funds – investment without limit

in foreign investment funds – Qualified Funds –

• at least 67% of NAV in foreign financial assets
• Invested vehicles must be subject to extensive regulation and

supervision by recognised foreign authority

• Retail Funds –

– Increase from 10% to 20% in investment in foreign assets

33 33

Obstacles

• High returns from Brazilian domestic fixed income products
• Distribution channels concentrated in big banks
• Concentrated asset management market – 88% of AUM in top

ten managers – consider alliances with local managers and distributors

• Brand recognition
• Complex tax regime

34 34

Questions?

35 35

Latin America – One Region – Multiple Markets

36 36

General Themes

• Overview of the market
• Traditional views of the Latin American market
• Distribution Channels
• Challenges & Trends worth noting
• What is the opportunity for Ireland Inc.
• Considerations in approaching specific markets

37 37

Introduction

• In the period post the Global Financial Crisis Investment

managers have needed to re-evaluate their appetite for promotion in emerging markets.

• Latin America is not one single market – not unlike EU in that
• sense. National identity remains a significant differentiator.
• Increasingly Latin America is being lauded as ‘ The saviour of the

mutual funds industry’ from a European perspective.

• There are opportunities.
• Understanding the local market is key

38 38

Overview of the Market

• 600 million people
• As a region – a rapidly evolving middle class demographic
• HNW investors – highest concentration in the world
• US $6.7 trillion AUM by 2020
• Understanding of offshore investing is more advanced
• Some markets are more open/developed than others
• Chile, Colombia, Brazil, Argentina, Mexico

39 39

BNP & AXA – time to tap into LatAm 2014

• According to PwC, 1,466 UCITS funds were registered at the end
• f last year for distribution in Chile, which has the most mature

defined contribution pension fund market in Latin America.

• Another 767 were distributable in Peru, and the markets of

Colombia, Mexico and Panama are attracting their first UCITS funds.

• The vast majority are administered from Luxembourg and Ireland,

where BNP Paribas Securities Services has substantial

• perations.

40 40

BNP & AXA – time to tap into LatAm 2014

• The savings they tap come partly from high net worth individuals,

but also from the pension funds that are developing in Brazil, Colombia and Peru as well as Chile, whose youthful populations ensure they have more contributors than beneficiaries. “In some jurisdictions, regulations are relatively open to the idea

• f allowing pension funds to invest in non-local assets.”

Jean Devambez, head of asset and fund solutions at BNP Paribas Securities Services in Paris.

41 41

Traditional Views of the market

• Regulation or not?
• Volatility
• Case of Chile – Contagion
• Miss-informed Risk
• Membership of the BRIC club

42 42

Product & Domicile – BNP EuroHedge 2013

Domicile Fig.5a and Fig.5b show the breakdown by country for the UCITS and non-UCITS hedge fund industry.

• Luxembourg is the premier choice for UCITS funds, followed by

Ireland, capturing 88.1% of the market share between them. This is in stark contrast to the only 6% market share for the two countries for non-UCITS hedge funds.

• Luxembourg played a key role in supporting and promoting

UCITS during its early stages, gaining a significant head-start

• ver other domiciles in attracting UCITS funds.
• While being a later entrant to the sector, Ireland has also been

making good headway in growing its share of the business, and as such we expect both locations to gain further traction as the AIFMD is implemented in the region.

43 43

UCITS Penetration

44 44

Distribution Channels

• Registration vs Private Placement
• Retail vs Institutional Target markets
• Local Presence
• Remote
• Internal sales and marketing
• External distribution agents
• Consider the need for close oversight where AML and CDD are

viewed possibly with more flexibility.

• Information & data protection have a different reality in some

markets

• UCITS V – Register of beneficial ownership

45 45

Challenges & Trends to Consider

• It’s not Europe
• It’s about the Story
• Robust European AML & CDD vs local application
• It’s about the relationship
• Latin American based Investment Managers view Europe

as a new market

• Impact of oil & political stability crisis on the region

46 46

How Big? – Strategic Insight – New York 2014

• Latin America fund assets to exceed $3 trillion by 2020, driven by

appetite for Asia

• U.S. and European asset managers benefit most
• Institutional pension fund progress via UCITS:

“Chilean pension funds now hold 45% of its $155 billion in

• UCITS. Notably, the most appealing area of investment for

Chilean Pension funds in Asia. Leading fund firms working with exclusive or multi-partner third-party marketers such as Econsult, Compass and others include Fidelity, Blackrock, Franklin Templeton, Vanguard, Scroders, DFA and Investec. Of late, the data also shows increasing use of U.S. 1940 Act funds across Latin America,” stated Enskat.

47 47

Considerations in approaching the region

• Remember- they are buying…as much as we are selling.
• Choice of local, US 40 Act , Luxembourg, Cayman and Irish
• Market access through NRA market in US – Miami, Panama.
• Being there is worth assessing
• New product pipeline is a key to sustaining client retention
• The quality of flexibility and custom builds

48 48

Opportunity for Ireland

• Significant cultural connection – not often maximised
• Education – primary and post primary education through Irish

missionary programme dating back to 18th Century

• Education has always been a valued component of new and

emerging nations – as much in Latin America as Ireland

• Immigration
• Honour based societal structure
• Simpatico
• It’s about the relationship…like all relationship it requires effort

and mutual respect/recognition

49 49

Latin American Markets Assets - Cross Border Category – Strategic Insight Dec 31 2015

All data excludes Internal FOFs, FOHFs, Index and Money market funds

50 50

Latin America Market – Gross Sales – Cross Border

All data excludes Internal FOF, FOHF, Index and Money Market Funds

51 51

Latin America Marker - Net Sales

All data excludes Internal FOF, FOHF, Index and Money Market Funds

52 52

The Relationship Factor – Irish Diaspora

• In Argentina – 400,000 people approx.
• In Chile – 125,000 people approx.
• In Peru – 80,000 people approx.
• In Colombia – 75,000 people approx.
• In Mexico – 500,000 people approx.
• In Brazil – 25,000 people approx.

53 53

Reference and Source Material

• Review of Global Distribution of Irish Funds – PWC 2010
• Building your gateway to Latin American Investors – BNP Paribas

2014

• LatAm Investors target UCITS Funds – BNP & AXA 2014.
• Offering Cross Border Investment Product and Advisory Services

to Clients in Latin America – C.Christian – Dechert LLP 2012

• Funds Distribution in Latin America (extract) – PWC 2014
• Latin America – Investment Powerhouse – AFINA 2014
• Strategic Insight – Focus on Latin America – several articles

2012-2015

• Corelli Report – Latin America Review 2015.

55 55

Moderator: Panellists:

North American Showcase Event

Utilizing the ICAV for North American Distribution

Rosaleen Carey, Director – Tax, PwC John Otis, Institutional Portfolio Manager, Brandes Investment Partners Chris Christian, Partner, Dechert LLP

56 56

Agenda

• Introduction
• What is the Opportunity in North America?
• What are the relevant regulatory and tax considerations?
• How does a UCITS access the NRA Market?
• Questions

57 57

Introduction

Panel Introduction

• Chris Christian, Partner, Dechert LLP
• Rosaleen Carey, Director – Tax, PwC
• John Otis, Institutional Portfolio Manager, Brandes Investment

Partners

58 58

Introduction

What is the Opportunity in North America?

• Canada

– Pension Market – High Net Worth Market

• United States

– U.S. Tax-Exempts – U.S. Taxable Investors – U.S. Financial Intermediaries with Non-Resident Alien Clients

• Other Markets

59 59

What are the Regulatory & Tax Considerations?

Using the ICAV For Direct Sales: Taxable Investors & U.S. Tax Exempts

• Regulatory Considerations

– U.S. Securities Act of 1933: Share Registration – U.S. Investment Company Act of 1940: Fund Registration – U.S. Investment Adviser Act of 1940: Manager Registration – U.S. Securities Exchange Act of 1934: Licensing & Reporting – Commodity Exchange Act: Pool Operator & Manager Registration – Department of Labor: ERISA – U.S. State Registration Considerations

• Tax Considerations

60 60

Taxation Considerations

• Foreign investors and US non-

taxables: where you have underlying US assets you will typically want to use a corporate blocker – these investors will not want to come into a checked entity directly

• Not an issue if there are no

underlying US asset

• If there are underlying US assets

and foreign investors come in through a checked entity could result in US filing obligations

• US non-taxables will want a

blocker where there is leverage to prevent attribution of UBTI

Assets U.S. Feeder Fund

     

U.S. Taxable investors Foreign investors and U.S. Exempt investors

ICAV (Ireland)

Offshore Feeder Fund

61 61

Taxation Considerations for the ICAV

• Does the ICAV itself make the application to the IRS to be seen

as a partnership for U.S. tax purposes or is this the responsibility

• f the U.S. investors?
• What is the tax position for overseas investors (neither U.S., nor

Irish) investing into both US and non-US investments markets via an ICAV?

• Can an ICAV “check the box” on a sub-fund by sub-fund basis

(from both an Irish and U.S. perspective)?

62 62

What are the Regulatory & Tax Considerations?

Indirect Opportunity: United States Regulation S Market

• Non-Resident Alien (NRA) Market: Regulation S Market

– Continues to grow in size as economies in Latin America grow and investors look for safe place to brokerage – NSCC and wholesale coverage required by wire-house channel – U.S. Broker-Dealers / Wirehouse Channel – U.S. Wealth Management / Financial Advisers – Clearing Platforms for U.S. Advisers – New York, Miami, Houston, San Diego - Major Coverage Markets

63 63

How does a UCITS Access the NRA Market?

Focus on the NRA Market

• Understanding the NRA Market (wrap, fee based, discretionary,

non-discretionary)

• Gateway Demands to Global Private Wealth
• Share Class Structuring to
• Understanding Platform Demands

– Seed Capital – Track Record (Use of Related Performance) – Total AUM Requirements – Coverage Requirements

64 64

Accessing U.S. Non-Resident Customer Market

Board of Directors

Sub-Fund 1

UCITS Umbrella Fund

Class A (USD) Class C (USD) Class I (USD) Class X (USD) Class X (GBP) Class X (EUR) Class F (USD) Independent Director Independent Director Director Director Director

Administrator Adviser

Promoter

Custodian Distributor Auditor $

Retail (Load / Trail)

NRA / U.S. Broker-Dealer (Finder Fee) NRA / U.S. Broker-Dealer (No Load / Trail) (Separate Accounts) Direct Institutional / U.S. Tax Exempts

$

Sub-Fund 2

$ $ $ $

Sub-Fund 3 Sub-Fund 4 Sub-Fund 5 Sub-Fund 6 Sub-Fund 7 Sub-Fund 8 Sub-Fund 9 Sub-Fund 10 Class N (USD) NRA / U.S. Broker (Wrap / Clean Class)

$

Share Class Structuring

66 66

Moderator: Panellists:

Switzerland

Update on Distribution in Switzerland

Martha Gray, Blackrock Daniel Hafele, Acolin Neil Carnegie, Carnegie Fund Services Killian Lonergan, Brown Brothers Harriman

67 67

• III. Time-line to FINMA authorisation for distribution to

Non-Qualified and Qualified Investors - work flow:

Responsible party Business days Task 1.

Fund & CFS 15

• a. Fund & CFS negotiate a representation agreement and a paying

agent agreement.

• b. In addition, CFS provides the Fund with the Agreement on the

Terms of Commercialisation (TOC), amended to reflect the specific characteristics of the Fund.

• c. The Fund requests its National Regulator to issue an original signed

copy of the attestation for the Fund.

2.

CFS

• a. Meanwhile, CFS adds the ฀

information for investors in Switzerland฀ in the prospectus and the key investor information documents to be authorised by FINMA for distribution in Switzerland (the ฀ Swiss฀ prospectus and KIIDs).

• b. The ฀

Swiss฀ prospectus and KIIDs (translated into a Swiss national language) are sent to the Fund.

• c. The cover page of the prospectus is sent to the Fund for signature

by both the Fund and the Custodian.

• d. Collect annual and semi-annual financial reports (if available),

which are required to be translated into the chosen Swiss national language.

• e. In the event that the Prospectus, the KIIDs, the Articles are not in a

Swiss national language (French or German) CFS can undertake the translation, in-house.

• f. CFS prepares the request, addressed to FINMA, for the Fund to be

authorised for public distribution in Switzerland.

68 68

• III. Time-line to FINMA authorisation for distribution to

Non-Qualified and Qualified Investors - work flow continued

Responsible party Business days Task 3. Fund & custodian 5

• a. The Fund and the custodian sign the cover page of

the ฀ Swiss฀ prospectus.

• b. A copy of the Articles is validly signed by the directors of

the Fund.

• c. The Fund has all the agreements, mentioned in point 1,

signed by the parties concerned.

• d. The documents are sent to CFS.

4. CFS 1 On receipt of all signed agreements and cover pages of the ฀ Swiss฀ prospectus, the KIIDs and the attestation (in

• riginal) delivered by the National Regulator, the request

for authorisation, addressed to FINMA, is finalised by CFS. 5. CFS

• CFS files the formal request for authorisation to FINMA,

with a copy sent to the Fund. 6. FINMA 20 The FINMA issues authorisation for the Fund to be distributed in Switzerland. Total business days 41

69 69

Time-line to Swiss representation of an Alternative Investment Fund* for distribution to Qualified Investors - work flow:

Responsible party Business days Task

1.

Fund & custodian 15

• a. Fund & CFS negotiate a representation agreement and

a paying agent agreement.

• b. In addition, CFS provides the Fund with the Agreement
• n the Terms of Commercialisation (TOC),

amended to reflect the specific characteristics of the Fund.

• c. Signing of the Representation Agreement and the TOC

by the Fund and CFS and the Paying Agent Agreement by the Fund, the Custodian Bank, the Paying Agent and CFS.

2.

CFS

• Meanwhile, CFS inserts the name of the representative

and the paying agent in the prospectus or Information Memorandum and related fund documents for use in Switzerland. Total business days 15

* Alternative Investment Fund: in this context it refers to Private Capital Funds, European Alternative Investment Funds, Non- European Alternative Investment Funds and UCITS Funds which are only distributed to Qualified Investors. Time budget: 3 weeks, after successful due diligence and subject to the speed attributed by each of the parties to finalise their specific tasks. CFS guarantees the fulfilment of its obligations according to the timeline mentioned above.

70 70

Highly fragmented Distribution in Switzerland

Platform 3 Platform 2 Platform 1 Private Bank 2 Pension Plan Independent Asset Manager Private Bank 4 Private Bank 3 Euroclear/Clearstream Qualified Investors Swiss Private Investor Life Insurance Private Wealth Private Wealth Family Office Pension Fund Insurance Co Private Bank 1 Retail and Qualified Investors Transfer Agent / Custodian Bank Foreign Private Investor

72 72

Moderator: Panellists:

THE CHANGING LANDSCAPE

Update on Distribution in the UK

Jon Willis, Calestone Brian Kelleher, Dillon Eustace Arun Neelamkavil, Deloitte Len Sutton, Executive Director, JP Morgan

73 73

Market Context

• Changing

– regulation (RDR, Mifid - explicit pricing & transparency), – pension rules (annuities), – demographics and technology and innovation – has driven Increasing channel competition between distributor and fund provider (Tug of War)

• This has driven market participants to focus on

– move to whole of wealth – offshore funds – new asset classes (ETFs, Peer to Peer) – D2C and omni-channel distribution models, – with longer term trend towards client centric distribution

• And has led to pricing & TCO Pressure on the whole of the

intermediation chain

74 74

Market Structure Trends

• Drivers of Change
• Platform Challenges
• Provider Challenges
• Implications
• Market Structure Trends

75 75

Drivers of change

• Regulatory
• New Pension & Savings Rules
• Demographics
• Technology & Innovation
• RDR, Mifid2
• Annuities – Drawdown
• Client Centric Distribution
• Robo-Advisory

76 76

Platform Challenges

• Explicit Pricing
• Clean/Super Clean share classes
• Move to whole of wealth
• Offshore funds
• Peer to Peer / ETFs
• Orphaned Clients

77 77

Provider Challenges

• Regulation Mifid 2 – Transparency (Data)
• Clean/Super Clean share classes
• D2C / Robo Advisory
• Cross Border
• TCO

78 78

Implications

• Fragmentation / Consolidation / Multi-channel competition
• Share class proliferation
• Asset Classes (ETF’s, Peer to Peer)
• New Channels (Robo Advisory, D2C)
• Transparency & Suitability (Data)
• Pricing Pressure on intermediation chain – focus on TCO

79 79

Question 1

• What’s the “one big thing” you would change that would improve

the distribution of Irish Funds in the UK?

80 80

Traditional Model Distribution

81 81

Omni-channel Digital Distribution

82 82

Client Centric Digital Distribution

83 83

Question 2

• What is the likely impact of Fintech developments on the

distribution of Irish Funds in the UK?

84 84

Question 3

• Will UK TTF’s such as the Authorised Corporate Scheme

‘close’ the UK market to Common Contractual Funds? – Polling Yes/No

85 85

Question 4

• Is there a future for the retail alternative investment fund in

the UK? – Polling Yes/No – Does the panel agree?

86 86

Question 5

• What do you believe the impact of the Brexit vote will be on

the distribution of Irish Funds in the UK? – How many people in the room think it will become more difficult? – How many think there will be no change?