LONDON, Jan. 25, 2021 /PRNewswire/ -- The Fund
Communication Solutions leadership team of Broadridge Financial
Solutions, Inc. (NYSE:BR), a global Fintech
leader, reveals its investment industry predictions for
2021.
- "We'll see a drive to consolidate service
providers," says Arun
Sarwal, head of Broadridge Fund Communication Solutions.
"How many different service providers does your company depend on?
The answer is increasingly likely to be a lot. From regulatory
reporting, to back office funds administration, to some IT
functions, the list goes on for asset management firms. It becomes
even more complicated when your business operates across several
jurisdictions. But outsourcing to so many different providers
becomes costly and complicated. The management of proliferating
relationships and related SLAs is creating a significant overhead
in itself. So, amid growing cost pressures on asset managers,
expect to see a major drive from them to reduce service providers
in the next 12 months. The result? Niche outsourced service
providers will be challenged, as companies seek to work with
service providers that can provide multiple solutions harnessing
the efficiencies that this affords."
- "Watch for continued asset management
consolidation," says Gerard
Gilsenan, head of sales, Broadridge Fund Communication
Solutions. "We expect to see further asset management consolidation
in 2021, as cost pressures on investment houses continue to rise,
against a backdrop which sees plenty of liquidity looking for a
home. It's tough out there, with investors putting pressure on fees
and operating expenses continuing to rise, in no small part due to
ever increasing regulatory requirements. Asset managers have
already turned to mergers and acquisitions in recent years in a bid
to achieve greater scale. Notable were Invesco's acquisition of
Oppenheimer Funds in 2019 and Franklin
Templeton's agreement to acquire Legg Mason this year, creating a $1.5 trillion AUM firm. We see further potential
consolidation and tie-ups. Be on the lookout for big deal making in
2021."
- "Don't expect a divergence of regulatory
reporting," says Paul
Poletti-Gadd, chief solutions officer, Broadridge Fund
Communication Solutions. "How much will UK regulations diverge from
the EU after Brexit? That's the million-dollar question, but
regarding regulatory reporting in particular, we think the answer
is not much. Divergence in reporting requirements simply doesn't
make any sense. Scale and efficiency rule supreme and there is no
great value in creating separate reporting regimes beyond what
already exists. So, while there is likely to be a lot of noise
around regulatory divergence, we predict few changes to the
European fund regulations for which we support our asset manager
clients. This is an area we will be keeping a close eye on."
- "Expect more change in platform ownership," says
Sarwal. "Custodians and banks are increasingly taking an interest
in fund platforms. We've already seen, for example Clearstream
acquire a majority stake in UBS's fund distribution platform
Fondcenter AG, a deal which completed in September. And after the
completion of a strategic partnership in 2020, French bank BNP
Paribas now holds a 22.5% stake in wealth management platform
Allfunds. Platforms are looking increasingly attractive to banks,
providing ready-made technology, and greater scale and breadth of
their fund offering to clients. More deals are likely – watch this
space."
- "ESG reporting will and must be standardised," says
Poletti-Gadd. "The rise of ESG (Environmental, Social and
Governance) investing shows no signs of slowing down and is sure to
have another huge year in 2021. For example, PwC forecasts as much
as 57% of mutual fund assets in Europe will be held in funds that consider ESG
criteria by 2025. ESG is one of the most complicated concepts in
the investment world and as BlackRock has recently pointed out, ESG
funds are governed by an "alphabet soup" of standards, with various
reporting frameworks and competing initiatives. So, there can be
little doubt that globally recognised standards are needed. As well
as helping investment houses, this would provide a better outcome
for end investors. Such is the enormity of the ESG market and
pressure for change that we hope to see significant progress
towards better standards next year, and the adoption of
standardised reporting is certainly something we will be monitoring
closely."
About Broadridge
Broadridge Financial Solutions, Inc.
(NYSE: BR), a $4.5 billion global Fintech leader, is a
leading provider of investor communications and technology-driven
solutions to banks, broker-dealers, asset and wealth managers and
corporate issuers. Broadridge's infrastructure underpins proxy
voting services for over 50 percent of public companies and mutual
funds globally, and processes on average more than U.S.
$10 trillion in fixed income and
equity securities trades per day. Broadridge is part of the S&P
500® Index and employs over 12,000 associates in 17 countries.
For more information about Broadridge, please
visit www.broadridge.com.
Media contact:
Hannah
Polson
Cognito
+44 (0)7974 244217
BroadridgeEMEA@cognitomedia.com