Deputy Chairman of FECIF
Unique Research: In the first two years of the FECIF Expertise initiative, what have we learned so far?
It has been two years, since FECIF started its Expertise initiative, a huge push for greater and better knowledge about the pan-European financial advice and intermediation sector. Since I have been honoured to chair the whole project among FECIF board members, I feel it is a good time to balance our first steps a little bit. And, of course, summarise, what have we learned.
So, what has been done during those two years? First and predominantly, our White book (WB) research project, the first comprehensive data-driven overview of the European advice industry, was completed. It was a tremendous challenge, given the fact that there is no valid and complex database on our sector. Then in 2017, regular biannual surveys among our members commenced, yielding two very interesting areas of knowledge so far. This will continue with our second survey of 2018, which is already underway, whilst the next iteration of the WB is scheduled to take place in 2019.
What about our results? More than anything else, we have found that the advice and intermediation industry is highly heterogeneous across Europe. Take for example the composition of a typical adviser´s product portfolio. Whilst in the West, his or her work is mostly about investments, Central and Eastern Europe is focused on insurance. And investments are seen as the most prosperous area, business-wise. Accordingly, the productivity per adviser is much higher for example in Belgium, with less people producing far more sales, than in the Czech Republic. So far, this is not that surprising, yet such a conclusion had not been empirically confirmed until now.
What is surprising are the differences in regulatory regimes our industry “enjoys” in different countries, whilst theoretically operating under the same legislative umbrella of MiFID II, PRIIPs and/or IDD. For example, the latter insurance directive brought more restrictive remuneration rules to a number of European countries, such as Austria, Poland or Spain. In these countries, insurance agents have enjoyed more relaxed regulations in this regard, while other countries made their advice sector comparatively less competitive. Our results here clearly show that the harmonisation among the Member States is taking place by applying the most severe legislation, not the most common.
The same heterogeneity was found in our last survey, focused on the Fintech agenda. Not only do Fintech companies focus on different business fields in different countries, but they also enjoy less strict regulatory regimes in some States, dealing with different obstacles and even daring to disobey the rules frequently – in countries traditionally profiled as very State-controlled. This underlines the fact that Europe is hardly a consolidated financial market, when it comes to financial advice and innovation. Is harmonisation through regulatory repression a good way to go, considering the small and medium enterprises that mostly reside in our sector?
I leave the answer to this question with you, dear reader. But what I can assure you is that the FECIF Expertise initiative, that has already begun to unveil interesting data, has only now started to fulfil itself. And we will bring more interesting data to the table very soon, even if not politically correct and convenient for some.