Unintended consequences from the PRIPs regulations will put the asset management industry at risk of losing business to insurance companies and banks, according to EFAMA.
In an interview with Financial News, EFAMA president Christian Dargnat said the wave of legislation that has flooded into the sector since 2008 has created a three tier market, gifting the upper hand to insurers and banks. He said: “With PRIPs, we are adopting something with major unintended consequences from insurance regulation [leading to] the fragmentation of the European insurance market". “We are going in the opposite director of what the regulators had intended. What has developed is a fragmentation of the European market.”
Dargnat said that the asset management sector is suffering something of a reputational crisis by accident because those in authority do not necessarily understand what it is that fund management firms do. As a result, he said, investment management companies are being lumbered with regulations from other, neighbouring sectors, because regulators and politicians believe asset management to be the same, or very similar.
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