Luxembourg - Alfi

A New Wave of Sophistication
• Both Institutional and Retail / HNWI Investor segments becoming more
sophisticated, though dynamics vary between segments.
The Sophistication Trend in Institutional and Retail / HNWI Investor Segments
Institutional
• More rigorous evaluation criteria prior to investment:
– Lengthier, more structured reviews of processes/controls
– Require greater transparency, less discretionary style drift
• Improved oversight of investments:
– Better internal risk-management processes/governance
– Improved use of risk metrics and Investment Committees
• Increased use of Investment Consultants:
– 2009 BCG survey of European Institutional Asset Mgrs
– 33% expect consultants role to increase in developed markets,
e.g.; UK, Germany, France
– 50% expect greater consultant involvement in Middle East and
Asia
Retail / HNWI
• Expectation for Distributors to provide better service:
– Need for more professional and transparent service
– Seek clarity regarding products, fees, and risk
• Returning appetite for new and alternative offerings:
– Sales of retail structured products growing in 2010
– Focus on more informed buying of these products
• Distributors in turn expect better service from Asset Managers:
– Demand client-tailored, transparent, competitive offerings
– In some cases are reducing the number of managers used
– Expect enhanced support model to their retail networks from
their asset management suppliers
Combined Implications
• Investor activity aligning with regulatory/governmental focus.
• Emphasis on end-to-end transparency in product content and investment process
• Also an expectation for improved service and value-added tools/capabilities
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