“The marketplace of investment undertakings in Austria has become significantly more institutionalised in recent years,” remarked FMA’s Executive Board, Helmut Ettl and Klaus Kumpfmüller in summarising an analysis of the development of licenced investment undertakings over the last few years. While the number of investment undertakings in Austria holding licences has fallen from 167 to 111 (consisting of 60 investment firms and 51 investment services providers) within the last five years, at the same time the average assets under management per client has more than doubled to € 245,000 since 2013. The number of clients has fallen during this period from 407,000 to 180,000 due to the fact that the licenced investment undertakings have increasingly specialised on the market segment for professional clients. 78.4% or € 35.7 billion of the total assets under management of the clients of approx. € 45.5 billion come from professional clients. For individual portfolio management, the proportion of professional clients measured in terms of assets under management already stands at 92.6% out of a total of € 23.6 billion. In addition investment firms acting as third-party managers of investment funds currently have € 9.2 billion assets under management, thereby almost as much at the banks in this segment (€ 10.8 billion).
Market trends
“The institutionalisation of providers of investment servicess is not only reflected in the more demanding client structure, but also in terms of the increasing specialisation of the providers,” the FMA’s Executive Board remarks: “A focus either on individual or collective portfolio management is to be observed, with a trend moving away from structured distribution towards advising retail clients, as well as a trend to complement personal financial advice with robo-advice or in the case of the mass market segment even to replace it.”
Due to their being independent of product issuers, licenced investment undertakings are able to make use of the full range of products on the market and to guarantee independent advice for investors. This form of investment advice is gaining increasingly in importance amount the investment undertakings – in particular also in light to the stricter requirements regarding the provision of investment services that enter into force from next year as a result of the MiFID II Directive.
The investment undertakings that are active on the financial market by virtue of holding their own licence are additionally increasingly focusing on transactions that require a licence. The proportion of investment undertakings, whose business activities predominantly focus on business requiring a licence, stands as just under 70%. Less than one third of providers holding a licence focus on predominantly commercial activities (e.g. insurance brokerage or commercial financial advice).
Structural change among investment services providers
The falling number of licenced undertakings is a reflection of a far-reaching structural change in the investment services sector. After all, the number of investment service providers has simultaneously increased that work as tied agents (VGV; vertraglich gebundene Vermittler) or securities brokers (WPV; Wertpapiervermittler) under the liability umbrella of a licenced legal entity. Although some banks also make use of external brokers for providing investment services, the focus on outsourced distribution lies firmly with the investment undertakings. As of 31.08.2017 a total of 48 investment undertakings made use of approximately 590 securities brokers as well as 220 legal persons and 1,160 natural persons as tied agents for investment services. By contrast a mere seven banks provided investment services through 25 legal persons and 430 natural persons as tied agents. With effect from 03.01.2018, this trend will be taken into account by means of the introduction of enhanced inspection competences by the FMA in the form of direct inspection and information powers towards tied agents and securities brokers. Furthermore, all persons who act as brokers on behalf of and on the account of a licenced legal entity in the market, are required to registered in the public register of tied agents and securities brokers maintained by the FMA (in German only: https://www.fma.gv.at/finanzdienstleister/wertpapierdienstleister/abfrage-vgv-und-wpv/).
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-6006
+43/(0)676/882 49 516