By Douwe Miedema, European Wealth Management Correspondent
LUXEMBOURG (Reuters) - Small asset managers refraining from large-scale selling of products from rivals say they are benefiting from the credit crisis as clients look for a tighter control of investment decisions.
Small banks now routinely sell financial products manufactured by large asset managers, offering clients a choice between "home-baked" products and often more complex financial tools produced by investment banks.
But the phenomenon - known as open architecture - is getting a rethink now that clients flee into less complex products from a provider they know.
"Especially in these uncertain times you control the entire process from A to Z. With your own funds you (have) that much more control," Guy Wagner from Banque de Luxembourg, said at the Reuters Fund Summit.
Small asset and wealth managers have long been perceived to be struggling, as clients become financially more savvy, asking for the full gamut of financial products including hedge funds, private equity and structured products.
But the trend was now back to basics - even for institutional investors with deeper pockets.
"We see the trend for institutional investors, on the one side they go to small groups if they can show outperformance, otherwise they go to ETF's," said Marcel Schnyder, a portfolio manager at Liechtenstein's LGT private bank.
ETF's -- or exchange traded-funds -- track any given index of asset prices, offering wealthy institutional investors the advantage of by definition never underperforming the market. Continued...
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