Almost half of European asset managers lack confidence in transparency around board level decision making

Almost half of European asset managers lack confidence in transparency around board level decision making

14 March – New research has highlighted how European asset management professionals have major concerns about the transparency required to satisfy regulators, with 43% admitting they are not completely confident there is adequate transparency around their board level decision making.

The study, conducted by online board portal provider eShare with delegates at the recent ALFI European Asset Management Conference 2018 in Luxemburg, also revealed the on-going importance of governance and compliance. 91% of asset management professionals said governance and compliance are among the top priorities for their organisation.

“Both Priips and Mifid II were designed to provide greater transparency into how FS firms deliver services, but they have undoubtedly introduced a great deal of complexity too, as asset managers struggle to meet the new regulatory requirements,” said Alister Esam, CEO, eShare. “This complexity means board decisions are in the spotlight more than ever and so transparency into that decision-making is essential. Could asset managers be doing more to demonstrate how they arrived at certain decisions?”

The research was intended to gauge the overall mood of the European asset management sector, and the findings highlighted the doubt felt by many in the industry around Brexit. 48% of asset management professionals say their organisation is highly concerned about the uncertainty and lack of clarity over Brexit.

In February 2018, the European Commission wrote to asset managers to warn them of the “legal repercussions that need to be considered” should the UK leave the EU with no firm withdrawal agreement. The letter described potential scenarios of market shutout for UK fund companies, and possible requirements for asset managers to review disclosures and eligible investments.

“With a complete lack of clarity over what will occur in the asset management sector when the UK leaves the EU in 2019, it is no surprise that so many asset managers are concerned about what the future will hold,” continued Alister Esam. “It makes preparation that much harder, but also highlights the need for transparency into decision making, with some potentially far-reaching decisions to be made over the coming 12 months.”

Such uncertainty has created a window of opportunity for fintech providers to engage with asset managers to deliver smarter approaches, yet 36% of asset management professionals say that so far, the impact of Fintech on European asset management has been overstated.

“Digital innovation is a vital response to the challenging market conditions – an increasing regulatory burden, Brexit uncertainty – asset managers are facing,” concluded Alister Esam. “But essential as digital technology is becoming, it is more important to continue to develop and define better human-centric experiences. It’s an industry still based on relationships, and technology should support that, not try and change it.”

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