In the last decade the banking industry has made tremendous
efforts to digitalise its services. The investment industry has
been slow to catch up, but has begun to find its footing with
robo-advisors making a loud entrance.
But what about funds? Have you ever invested with your
smartphone?
Funds are mostly sold to retail investors via distributors (e.g.
banks or financial advisors) that receive commissions on the volume
of fund sales—but this model incentivises distributors to
push funds with high commissions to retail investors instead of
searching for products that suit their needs best.
Thus, the European Commission has decided to put an end to this
system with the MIFID II directive, which bans the payment of
commissions to independent advisors. This represents a real
paradigm shift for fund distribution. But it also brings some
unintended consequences: independent asset managers (i.e. those
without a proprietary distribution network) will face a
