Autif is considering categorising fund supermarkets as an individual distribution channel to avoid d...
Autif is considering categorising fund supermarkets as an individual distribution channel to avoid distortions in its Isa and unit trust sales figures, writes James Phillipps.
Currently Isa business coming through fund supermarkets is reported by fund managers as unit trust business, rather than Isa sales, because the fund supermarket is the Isa manager, rather than the fund manager.
Given that fund supermarkets are not under any obligation to report their sales figures to Autif, an increasing proportion of Isa sales are being wrongly recorded as unit trust sales.
Clare Arber, head of communications at Autif, said the association is concerned that Isa sales are being understated. While it wants to address this inaccuracy in Isa sales reporting, the association is uncertain about how to avoid the duplication of unit trust sales figures, should it start receiving sales figures from both the fund supermarkets and the fund manager.
The association is set to meet after the summer to discuss how sales passing through fund supermarkets should be categorised and it will also discuss whether sales through fund supermarkets should be considered as coming from the intermediary or direct channel.
The volume of Isa business transacted through fund supermarkets has been increasing month on month, according to both FundsNetwork and Cofunds. FundsNetwork claims to have achieved just over a 10% market share of intermediary Isa sales and has just passed the £400m mark for sales, while Cofunds claims to have achieved a 6% market share of intermediary Isa sales, bringing the total assets of the supermarket to over £100m since launch.
Clare Arber, head of communications at Autif admitted that the trade body currently has little idea how much business does pass through fund supermarkets and the extent of any distortions in Isa sales figures.
She said: 'We get our fund data from our members and we do not know if this business has gone through fund supermarkets. Although it is a relatively small distribution channel at the moment, it may not stay that way.
'Fund supermarkets need to look at how they record this information and integrate that with our members. We need to make sure there is no duplication in the recording of sales.'
Dave Cowdell, marketing director at Fidelity, said Funds-Network is concerned that intermediary sales conducted through fund supermarkets are being wrongly classified as third party sales, along with sales force, tied agents and private client sales.
He said: 'Supermarket data will come from all of the fund groups and the danger is that supermarket sales are being categorised as third party.'
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