Market Segmentation (by geography)

Although, to many, the world is becoming a smaller place, that is not true of the fund distribution industry. The US has its own regulatory framework which dictates the operation of its domestic fund industry. Western Europe has seen fund rules become more cohesive – initially through the UCIT legislation and subsequent regulations. Asia, the Middle East and the rest of the world remain fragmented in their approach as to how funds can be marketed.

The move towards the establishment of global standards – clearly apparent in areas such as anti-money laundering – is conspicuous by its absence in the regulatory environment and standards that govern fund distribution. This creates both opportunities and difficulties for investment businesses.

This leaves fund promotors with the choice of restricting their focus either to their own domestic market, or to adopting a regional approach or a global strategy on a selected basis. The more diverse the geographical focus the greater the complexities which affect product design, the marketing approach and the management of regulatory issues.