Investire | November 2023
The relationship between external AMCs and distribution, notably financial networks and private banks, is undergoing a radical change.
The relationship between AMCs and distribution as we know it today is about to be 20 years of age – there have been ups and downs, financial crises and recent events which have undermined its foundations.
The data pertaining to the net inflows of AMCs confirm that, without the skills and willpower of the distribution – i.e., financial advisors and private bankers – they would not go far: indulging the herd, that is submitting to the lure of BTPs (i.e., long-term treasury bonds) is like following the sirens’ song with the risk of losing track and crash into the rocks.
The best financial advisors and private bankers, supported by leading banks and financial networks, have been showing a distinctive ability not to yield to temptation.
Ulysses, passing by the island of Capri, managed to resist the bewitching sirens’ song, asking to his mariners to be tied to the mast with his ears plugged with wax; similarly, the best financial advisors do not lose their way by following three commandments.
First of all, planning; second, diversifying – diversification has an essential intrinsic value when it comes to government and corporate bonds; third, weighting risk and performance. In this context, AMCs have a key role.
The best AMCs have been replacing a purely commercial approach, which brought them success over the past twenty years, with the ability to listen and support financial advisors and private bankers.
The key words are listening and personalization. The stereotype of the self-centered AMC sales representative used to work in the past, but is now outdated.
As a consequence, the AMCs that do not manage to alter their approach to the market run the risk of being perceived as a mere sellers of commodities.
There are two emblematic examples of how one should and must respond to the lure of BTPs by understanding their charm rather than denying it.
In particular, a financial network and an AMC used the acronym B.T.P. to suggest something entirely different, which however shares the same goals: deadlines, coupons and capital preservation.
Supporting financial professionals in listening to end clients and proposing solutions designed for each individual distributor allows AMCs to exit the dead end of mere economic bargaining over distribution fees.
Over 5.000 professionals (financial advisors and private bankers) interviewed periodically by FINER have very clear requests for AMCs: no identical products for all, but distinctiveness and innovation of the offer and support in building the market overview.
The AMCs who have the courage to engage with the market not only over collection data, often linked to circumstances, but over the ability of their team to make their way into the hearts of financial advisors and private bankers will prosper in the future.
The sun will return for AMCs with the drop in interest rates. One only needs to survive the night, but the morning will not be the same for all.
Nicola Ronchetti