Bringing you live news and features since 2006 

Raising investors’ awareness of long-term savings will help boost asset management industry, says EFAMA

RELATED TOPICS​

Raising retail investors’ awareness of the benefits of long-term savings will help rebuild confidence in the European asset management industry, according to the European Fund and Asset Management Association’s (EFAMA) members survey.

The poll aimed to understand the industry’s perspective on why there has been a fall in household savings in financial assets and what it believes are the solutions to address these concerns and encourage long-term savings for the future.

The survey was completed by a range of senior asset management experts at 46 corporate members, one associate organisation plus 10 associations – the equivalent of 57 responses from 21 European countries.

It  reveals that two-thirds (65 per cent) of industry participants thought that in current market dynamics lack of trust, market risk and poor performance were the most relevant factors behind the fall in savings in financial assets.

The survey also revealed that the majority of the industry believes that better communication (81 per cent), better advice (75 per cent) and better understanding of investor needs (74 per cent) is required at a distribution level to strengthen trust over market risk, highlighting the importance of investor education.

Ninety one per cent of respondents believe that retail investors still need to become aware of the benefits of long-term savings, most importantly of the fact that long-term savings tend to generate higher returns than short-term savings. More than three-quarters (77 per cent) of industry experts polled said the most relevant reason for this is because long-term savings provide access to equity risk premium and liquidity premium.

The majority (72 per cent) of members surveyed believe the most relevant way for the asset management industry to raise awareness of the importance of long-term savings is through convincing authorities at EU and national level to encourage long-term /retirement savings.  The European industry also supported (58 per cent) the idea of launching a common information initiative on long-term savings benefits to help raise awareness.

Finally, the poll looked at factors that would encourage asset managers to develop funds specifically targeting long-term savings, 82 per cent of respondents felt the most relevant factor would be to create greater incentives for retirement savings, followed by greater household demand for long-term savings products (65 per cent) and 54 per cent felt that a common EU framework dedicated to long-term investments for retail investors is needed.

Claude Kremer (pictured), president of EFAMA, says: “Holdings of investment funds via retirement savings has continued to rise since 2008 but the overall acquisition of financial assets has fallen with demand for investment assets taking a big dip. This retreat from direct acquisitions of investment assets raises many question about the causes, remedies and potential impact on economic growth.

“The survey reveals that the industry believes that rebuilding trust with retail investors will come through the promotion of long-term savings, which have the ability to generate higher returns than short-term savings. This means the European fund and asset management industry must work to educate investors at the distribution level about the need to extend their investment horizon. Furthermore, the industry must continue to engage with European and national governments to create incentives for investors to save for the long-term and their retirement.”
 

Latest News

Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

ETFs
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Lorraine Sereyjol-Garros, BNP Paribas
Following changes to the French Monetary and Financial Code and of the French market authority AMF’s General Regulation, it is...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by