4. Fee-Based is Still the Future
(Image: Tomasz Frankowski, Unsplash)
Hedge fund investing is not the only fee-based winner. Though regulators in the region have not signaled that they will be pursuing trailer fees soon – a significant revenue driver that poses more serious risks and conflict of interest – the upcoming rules are already part of an ongoing trend to tighten the transactional income space.
The new rules will do more than shutting down execution-only business for smaller players. The broader industry is likely to continue transitioning from its single product-pushing sales strategy to more scalable solutions.
Although portfolios may look more similar, many expect this to be for the better in the long-term: better net performance, better client relationships and better margins from fees.
