A new survey from Cerulli Associates finds that cross-border European managers plan to increase their sales efforts in Italy, France, Spain, and Germany during 2015.
Almost two-thirds of managers polled by Cerulli said they intend to increase their sales efforts in Italy – compared with 37 per cent of last year's respondents. And 43.2 per cent of managers surveyed plan to target France – compared with just more than one-fifth of managers polled for last year's report. More managers than last year also plan to increase sales efforts in Spain and Germany.
Cerulli found that competition in Europe is stiff and managers must be more strategic to sell outside their home market. So asset managers are establishing roots in selected countries.
Franklin Templeton reaped the rewards of setting up branches in Rome, Florence, Milan, and Padua with net inflows every quarter of between EUR800 million (USD972 million) and EUR1.5 billion, according to Assogestioni.
"This was a shrewd strategy that paid off," said Barbara Wall, Cerulli's Europe research director. "Many foreign managers launched funds in Italy, trying to sell them, either from a distance or by opening a branch in Milan. But sales is a local game and success is more likely if a firm has people on the ground-and not just in Milan," she added.
By opening branches on target territory, Cerulli found that managers can develop closer ties and enhance understanding with distributors. This is more effective than making regular presentations as part of a road trip, they say.
Angelos Gousios, associate director with Cerulli in London, and one of the main authors of European Distribution Dynamics 2015: Preparing for a New Era, said: "In our talks with Italian wealth managers they frequently say lack of time hinders their work. They do not have time to go to events. Having a branch down the road where they can pop in informally and discuss market developments over coffee is more attractive."
Another significant advantage to having a local presence is that a manager can tailor its message according to regional variations in disposable wealth, attitude to risk, and product choices, for example.