Market Monitor: No-nonsense take on delegated funds.

(From Professional Wealth Management (PWM))

Byline: Yuri Bender, Editor-in-chief

Selection of sub-advisers and underlying funds is a serious matter and one that is beginning to receive wider attention. Not just from private banks, fund houses and life companies, but from the overall parent groups, which run these separate entities.

This formalisation of strategy selection techniques at senior management level has become a key theme in the development of open architecture among Europe's wealth management groups.

PWM recently held its annual roundtable on the outsourcing of asset management strategies to external fund houses. Five of the seven private banks participating had established their own internal fund selection units. For some of the players, this was not a new phenomenon. Investment Solutions at UBS and Funds Research at SocGen have been around for several years. But CFM, a new unit at BNP Paribas, was formed only last year.

More than hype

Of course, there has been much mocking of the French bank by rivals, with accusations that the move is just part of a marketing-led hype of the "open architecture" concept.