Wealthy turn to funds stylists

German funds supermarkets are signing deals with intermediaries in an effort to boost their share of the market. Elizabeth Cripps reports on a rising trend. It is standard practice for the very rich to employ a stylist and personal shopper, thereby gaining a short cut – at a certain price – to that perfect designer outfit. It should come as no surprise, therefore, that investment-hungry individuals in the more developed European markets are doing their fund supermarket shopping with the assistance of a financial adviser. Nowhere is this more apparent than in Germany, with its well-developed network of advisory firms known as maklerpools. “Maklerpools would traditionally have some sort of antiquated system with some research, some fund screening technology and access to a select list of funds,” says Thomas Marsh, senior consultant at research house Cerulli Associates. “Now, fund service platforms are offering consolidated reporting, administration and record-keeping so, even if they take a bit of remuneration from the intermediary, in the long run they will be so much more cost efficient that it makes sense.” Deutsche Bank’s investment funds arm, DWS, has signed an agreement for its fund supermarket platform with leading intermediary Dr Jung & Partners. Similar deals have been forged between HVB Activest and maklerpools BCA and Top Ten, and between E-Base and Apella. In Germany, supermarkets account for roughly 1 per cent of the funds market, of E471bn. Mr Marsh estimates that co-operation with intermediaries could boost this cut to 25 per cent by 2007. In the UK, Fidelity and FundsHub are already targeting intermediaries. Other countries, with less developed fund supermarket industries, have yet to follow suit. All this is playing out against a backdrop of consolidation. Cerulli predicted last year that there would be between two and four supermarkets per country by 2005. The amalgamation process is already starting. One key example is Comdirect’s bid for beleaguered platform Consors in Germany. However, research by Sector Analysis confirms that pan-European platforms are still a long way off. This is hardly surprising: just as the perfect clothes for Barcelona might be less appropriate in Stockholm, so the different European markets still have different demands when it comes to investment products. Instead, Sector Analysis predicts the evolution of a “multi-local” model – a fund supermarket which uses common technology to provide multiple sites targeted at specific markets.