Managers brace for mutual recognition hurdles
Fund firms suspect high distribution costs in China will generate thin margins in the scheme's early days, but having to hire a distribution agent could help as they consider how to scale up.
Asset managers in Hong Kong fear "exorbitant" distribution costs in mainland China will lead to razor-thin profit margins in the initial years of the pending cross-border mutual recognition scheme.
Eleanor Wan, chief executive of BEA Union Investment in Hong Kong, acknowledged that while the market opportunity was huge, distribution channels in China were narrower on account of the dominance of the big four banks, meaning competition for shelf-space would be more intense.
“Ano…
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