In news that likely won’t surprise industry participants, a poll finds that regulation is a top challenge for Canadian asset managers.
In the poll of 82 managers by RBC Investor and Treasury Services, respondents selected increased regulation as their top near-term challenge, garnering 16% of choices, says a release. Increased regulatory obligations have also created a heightened sense of awareness of reputational risk among managers, it said.
To address regulatory challenges, managers are enhancing their service offerings (22%) and improving efficiencies (22%).
The release says that “regulations requiring asset managers to disclose details of their costs to end investors” may be a factor in the increased attention around improved efficiency.
That’s likely a reference to increased scrutiny of trailing commissions paid by managers and the trend of total cost reporting, proposed by the MFDA.
Read: Proposed class action lawsuit on trailing commissions filed against CIBC
A more efficient operation can also allow for an enhanced service offering, says the release.
While increased regulation remains the top challenge, most respondents believe that proper data management is a positive. For example, 95% say data can benefit their firms, enabling them to make more informed investment decisions (32%) and to better anticipate client needs (27%).
Other poll highlights:
- 45% of managers don’t plan to introduce new products in the next year; those who do will focus on ETFs (21%)
- 37% of managers say clients most value service; 23%, high returns
- 92% of managers at firms with more than $5 billion in assets under administration say environmental, social and governance is important, versus 44% of managers at firms with less than $1 billion in AUA.
About the poll: RBC Investor and Treasury Services conducted an online poll of 82 Canadian asset managers in the second quarter of 2018. Results represent their aggregate responses.