The Italian Financial Advice Market 2007

EXECUTIVE SUMMARY

Market Structure

Regulatory Developments

Competitor dynamics

Opportunities

CHAPTER 1 INTRODUCTION

What is this report about?

Who is the target reader?

How to use this report

CHAPTER 2 MARKET STRUCTURE

Introduction

Key findings

The financial advisory distribution channel in Italy is fairly large in comparison to fellow EU nations and comprises mainly of non-independent financial advisors

Bancassurers are the most important channel for provision of advice in the Italian market

However, the Italian financial advice market has a unique shape compared to the rest of Europe

A Promotore Finanziario is the Italian equivalent of an independent advisor

SIMs are legally separated bank stockbroking arms

Mixed-systems combine the banking & SIM models

SGRs (Società di Gestione di Risparmio) are banking arm fund managers

Promotori Finanziari are the main point of contact for Italian investors, leaving little room for independent advisors

There are currently just under 90,000 financial intermediaries in the Italian market

Italy is home to approximately 8% of the total European financial advisor community

Compared to the rest of Europe, the Italian financial advice market is dominated by single-tied advisors

Fees are usually charged on a commission-basis in the Italian market

Banks are the most important channel for distribution of financial products in the Italian market

Distribution of life & pensions in Italy also remains in control of the banks

Independent financial advisors play a minor role in life & pensions distribution due to inadequate regulation

Data

CHAPTER 3 REGULATORY DEVELOPMENTS

Introduction

Key findings

Consob is the main body regulating financial advisors in the Italian market

The Bank of Italy also has a role to play in regulation of the financial markets

ANASF is a professional association representing Italian financial advisors

NAFOP is Italy's national association representing ""fee-only"" advisors

And ABI, Assogestioni & Assoreti are organizations also working to further promote the awareness of their members' practices in the Italian financial market

The numerous associations and overlapping roles of regulators have created a confusing regulatory environment in Italy

The European Commission has introduced a number of regulatory reforms affecting the financial advice distribution channel in Italy in recent years

The Financial Services Action Plan

Insurance Mediation Directive

UCITS III

Markets in Financial Instruments Directive (MiFID)

Consob has done little to prepare financial institutions for MiFID and some believe they have actually complicated matters

However, MiFID is expected to rectify the issue somewhat & there are plans to strengthen Consob's ability to exert influence on the market

Bank of Italy has been more supportive in regulatory matters concerning Italy's financial market

However, both Consob & Bank of Italy's roles overlap, which can lead to confusion

The European Commission suggests a regulary 'pause' over the next five years

EC simplification project is likely to affect the insurance industry across Europe

The reclassification of financial advice has contributed to the underdeveloped nature of the independent advisory channel in Italy

CHAPTER 4 COMPETITOR DYNAMICS

Introduction

Key findings

Banca Mediolanum is one of the biggest intermediary SIMs in Italy, along with Banca Fideuram

Intesa SanPaolo is the new merged banking group of two of the biggest banks in Italy

Unicredito-owned Xelion Bank has a network of promotori who have started charging consulting fees

Nuoviinvestimenti is a niche independent advisory firm in Italy

Consultique is one of the few independent fee-only financial planners in the Italian market

Azimut is a fully independent asset management company

CHAPTER 5 OPPORTUNITIES

Introduction

Key findings

Opportunities in the Italian market are scant

The fact that many distribution channels are interlinked means investors have to take care in ensuring they are receiving impartial advice

As demonstrated by the closure of AWD

MiFID could signal an opening for the independent channel, as post-MiFID lawyers & accountants will have to be registered to continue to offer advice

There is still a lot to be done before independent advisory firms can mount a credible challenge against the banking channel

APPENDIX

Definitions

Further reading

Financial Advice Market SPP

Savings and Investments SPP

Interactive Databases

Reports

Briefs

Global Wealth Management SPP

Interactive Databases

Market Reports

Strategic Insight Reports

Wealth Management Competitor Tracker

Datamonitor Asia Pacific Wealth Management SPP

SPP writing team

List of Tables

Table 1: Number of Italian intermediaries, segmented by group, 2005

Table 2: Total number of intermediaries, segmented by country, 2005

Table 3: Italian intermediaries, split by channel, 2005

Table 4: Distribution of mutual funds in the Italian market by distribution channel, 2006

List of Figures

Figure 1: Alternative intermediary groups such as lawyers & accountants made up the majority of the non-bank advisory group in the Italian market in 2005

Figure 2: Alternative intermediary groups such as lawyers & accountants made up the majority of the non-bank advisory group in the Italian market in 2005

Figure 3: Italy was home to approximately 8% of financial advisors in Europe in 2005

Figure 4: Single-tied advisors dominated the Italian non-bank advisory channels in 2005

Figure 5: Retail banks control a considerable share of the distribution of mutual funds in the Italian market