Promotori must embrace key role

Financial advisers or promotori finanziari networks play a key role in opening up the fund range to retail clients in Italy. The open platform, which is currently just a hyped trend will grow significantly, however. This was the message conveyed to the Milan audience by Vincenzo Bafunno, chief executive officer at UniCredit Xelion Banca. Despite the fact that promotori networks’ assets represent only a small percentage of the banking activities in Italy – 8.5 per cent of the ?2,400bn total – 23 per cent of funds in Italy are distributed through them, according to Xelion analysis. This is a clear indication that promotori add more value than traditional banks servicing clients in the managed savings segment, said Mr Bafunno. More importantly, the networks of promotori have grown to account for 25 per cent of total net inflows of foreign funds in 2005, according to analysis of the UniCredit group bank. However, despite a growing number of promotori networks declaring to have embraced open architecture, in reality, third-party products still represent a small percentage of their total assets under management. Mr Bafunno stressed the importance of making concrete actions follow to declarations of intents, as “inconsistency does not pay off anymore”. “Firms declaring to offer multi-brand products need to be consistent in the retrocession systems employed for the promotori.” Practising what they preach, Xelion has embraced open architecture on all type of products, including funds and insurance products, explained Mr Bafunno. Fifty-five per cent of total assets managed are invested in externally managed products, which compares to only 13 per cent for the top ten promotori networks. Xelion stated that the retrocessions the bank gives to their promotori are the same for both in-house and third-party products.