In a rapidly changing financial market, in which interest rates on bank deposits are becoming less attractive compared to the investment return offered by professional market participants, the retail investors attention is increasingly turning to the securities market. In these conditions, the battle for clients between financial intermediaries such as brokers and trustees has escalated.
This session will cover topical issues related to the development of the financial market, with regard to the advantages and risks of various models; serving the interests of investors when offering them investment products; and employing unfair competitive advantages.
For example, brokers statutory right to use their clients monetary assets in their own interest means that service fees are reduced, making brokerage more attractive to clients. However, this model comes with increased risks for investors. In addition, the populations relatively low level of financial literacy is hindering the development of brokerage for a wider audience.
In this environment, highly qualified trustees, whose experience and skills allow them to determine the optimal investment strategy in accordance with the consumers appetite for risk, are an attractive proposition. However, trustees activities come with significant risks: trustees do not guarantee that anticipated rates of return will be reached, and cannot be held responsible if assets are lost in the pursuit of a particular strategy. Moreover, an additional barrier to the development of asset management in the retail sector is the low return offered by relatively small client portfolios, which forces trustees to set higher entry thresholds for retail investors.