Business finance news

Top 4 updates your Asset Management site will need in time for MifidII

Sean Williams on August 02, 2017

The new Mifid legislation is on track for a January 2018 implementation date, and it doesn’t look like many asset managers are particularly prepared for the change.

Developed in response to the global financial crisis in 2008, the regulation will affect businesses involved in the manufacturing, distribution and trading of financial instruments in the EU. Though it was originally due to come into place this year, the legislation deadline was pushed back in order to give companies time to comply.

This directive can be broken down into four key areas:

  • Investor protection,
  • Fee transparency,
  • Internal and external controls
  • Market structure

For many asset managers, complying with the legislation in time for the deadline will require a complete restructuring of their digital presence. They’ll need to adapt the way they present their products online – primarily by boosting their transparency; removing conflicts of interest; and protecting and prioritising the investor’s interests.

Optimas suggests this could be an expensive endeavour for Asset Managers to take on – Mifid threatens to send at least some players with low margins into financial danger, particularly if they try to tackle the issues in-house. It’s likely that firms could lose competitive ground to those that have made adjustments to their strategies.

Panellist Simon Ellis, global head of client segments at HSBC Global Asset Management, believes that asset managers could be about to enter an “arms race” in tech-savvy client communications.

Large firms are already buying stakes in new technology platforms and in fintech firms. New advances could be the way for marketers to communicate new MiFID changes in digestible chunks so clients get what Ellis calls an “Amazon experience”. 

What can we do to meet requirements?

According to research by PA Consulting, 78% of firms plan to use third-party solutions to help them comply.

Outsourcing can certainly help companies to meet new requirements very easily, without making any significant impact on the business.

If managed well, these solutions should also minimise regulatory compliance and execution risk.



At the moment, many asset management sites are ignoring vast amounts of information, due to a lack of capability to analyse and integrate data properly.

Many existing systems are not developed enough to handle complex data analysis. But new systems with the latest analytical capabilities could provide flexibility and scalability, improving business intelligence as a result.

The answer could be bringing Asset Management sites a centralised data analysis platform, which would capture relevant data on distributors, and replace existing manual questionnaires.

David Csiki, president of technology provider Indata, says: ‘Big data analytics rely on in-memory computing which is superior to traditional methods as it allows much more scalable and efficient data aggregation for Mifid II requirements”.
Centralised data could also enable real-time recording of investor behaviour.

One way to collect this information is by crafting a sophisticated investor modal for users to fill in before entering the site – this allows firms to track information about each and every user’s visit to their site.


Greater transparency is a key objective for Mifid II, thanks to more demanding rules about the information that asset managers must communicate to potential investors. More detailed information on charging practices will also be necessary – the new requirements include better information on risk, return and the future prospects of investments.

According to CEO of Kurtosys Mash Patel, the result of this will mean client disclosures ‘will get close to extreme’.

“Clear and transparent messaging around the independence of advice (or not as it may be), fees, nature of financial investments will all become mandatory disclosures. Also, confirmation of these disclosures needs to be a recorded fact. “Digital” can play its part here.”

Secure methods of declaring and periodically seeking confirmation from clients can yield big benefits. As can the sharing of key documents that contain these disclosures.


 For every Investor visiting asset management sites, there must be evidence provided of their financial suitability for investing. For this to happen, there must be a record keeping and management process that can be supported and represented clearly to managers.

According to Kurtosys, a digital strategy can help support these processes. Having embedded risk profiling and guided suitability tools within a secure online experience – coupled with automated reminders for reviews- could bring significant efficiencies.

The most sophisticated sites will offer audit recording software, which saves regular snapshots of web page edits so you can view a history of changes. The audit history technology should also keep a record of which documents are distributed to whom.


Mifid II demands a much stricter approach to how managers should handle complaints and essentially gives potential customers the right and the means to complain.

The challenge for fund managers will be building these reforms into existing customer complaints procedures in a way that is compliant, while also ensuring mechanisms are in place to help the business learn from its experience. That may require new reporting structures, to give senior management access to complaints data. Sites with the most sophisticated forms will be the most well received from January onwards – giving customers the chance to give detailed feedback, and allow senior staff to download and store information.


In general, if asset managers are prepared, MifidII needn’t be something to be afraid of. Companies should see the new legislation as an opportunity to implement modern and scalable sites that will give investors better experiences, and boost business as a result.

Greater investment in modern digital solutions could drastically reduce the risk and cost of MifidII – giving investors greater transparency, better advice and more sophisticated ways to invest.

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