Aberdeen receives master agent licence in Taiwan

Bucking a consolidation trend in TaiwanÆs asset management industry, the new licence will allow Aberdeen to conduct wholesale business directly with Taiwanese distributors.
At a time when TaiwanÆs financial regulator is pushing for more market consolidation, Aberdeen has bucked the trend by expanding its fund distribution platform in Taiwan. The fund house has added a master agent licence to its existing Securities Investment Consulting Enterprise (SICE) license in Taipei.

In the food chain of the fund business in Taiwan, a fund house needs a Securities Investment Trust Enterprise (SITE) licence for manufacturing products, then a SICE license to work out onshore distribution relationships with wholesale distributors. These wholesale channels are mostly via banksÆ wealth management networks and through investment-linked products under insurance policies.

With a coveted master agent licence û like the one Aberdeen has secured û fund houses can offer offshore products into a SICE before the products even reach bank shelves and retail clients. The new licence will allow Aberdeen to promote and offer its own Aberdeen-branded investment funds directly with wholesale distributors. Previously this function had been performed by INGÆs SICE in Taiwan û a relationship that has existed since 1998. (ING is the biggest offshore fund distributor in that market by fee income.)

Martin Tan, country head in charge of AberdeenÆs Taipei office, says ING will remain a partner and be one of the sales agents for Aberdeen in Taiwan. However, distributors that previously had relationships with ING have now re-executed new distribution agreements directly with Aberdeen.

Tan says there has been no major personnel changes at Aberdeen so far, and that Mable Chan, a veteran from AberdeenÆs Hong Kong office will remain in charge of channel sales, investment advisory and institutional sales support. He has already added staff to support the direct service needs now that Aberdeen has become a master agent.

ôOur immediate focus is wholesale distribution through our channel distributors on the current range of authorised funds,ö he says, adding he will further expand AberdeenÆs sales force in Taiwan as the firm increases its present product offering of 12 funds in the market. At this stage, Tan says Aberdeen has no plan to add an investment platform locally in Taipei.

The Financial Supervisory Commission hinted earlier this year that it would like to see consolidation in the asset management industry. Taiwan has the same number of fund houses as China û a total of 60. Yet the local market suffers from an unhealthy level of fund churning due to its modest population of 22 million, compared to the 1.3 billion population of China.

So far this year, most of the smaller fund houses have already merged with foreign houses. Among these, Deutsche, KBC and Schroders have taken over some of the smaller market players which would otherwise have been encouraged by the FSC to close down.
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