The way capital flows is changing. Alongside banks and traditional networks, digital platforms are increasingly claiming a prominent place in this chain. This shift is altering access points to markets and strengthening the role of standardized products in portfolio construction, such as ETFs.
European fund distribution is undergoing a gradual but profound transformation. Capital flows that historically moved through banks and traditional networks are increasingly being channeled via digital platforms into investment products.
This has consequences for asset managers—who must rethink their access to end investors—but also for preferred products and even portfolio construction, industry specialists warn.
“We are seeing a clear shift of retail flows toward digital platforms,” said Julius Weller, VP Broker at Scalable Capital, in a written response to questions from Investment Officer. According to him, the development is driven by easier market access, increased financial education, and the rise of standardized and low-cost products.
He is referring to ETFs, which account for approximately 70 percent of assets under management on Scalable Capital’s platform. Weller sees this as evidence of a growing preference for transparent, liquid solutions that are well suited for digital distribution. Investment plans with automatic contributions are also gaining traction, redirecting flows that previously went into traditional savings products.
Shift in power within the distribution chain
For Bruno Poulin, CEO of Ossiam, interviewed on the sidelines of the Natixis IM Media Summit in Paris, platforms are no longer a marginal channel. According to him, they are now attracting a growing share of flows that previously went to bank deposits or traditional funds, accelerating the structural reallocation of savings. Players such as Trade Republic already claim several million customers in Europe, illustrating the scale of the movement.
Platforms are thus positioning themselves as indispensable links. They control the client relationship and increasingly influence the direction of investment flows—a shift the industry initially underestimated, according to Poulin.
Pricing pressure on asset managers
For asset managers, this development translates into greater pricing pressure, in an environment where scale becomes decisive for maintaining margins. ETFs, already central to portfolio construction, are further strengthening their position as asset managers adjust their offerings to a more digital and cost-sensitive distribution landscape.
Not only asset managers, but also wealth managers and private banks are facing a shift in access to products and a further standardization of the building blocks they can use for allocations, particularly for core portfolio positions.
Not against but with digital platforms
For asset managers, the solution may lie in a different approach. Rather than focusing on loss of control, it becomes a matter of redefining roles. “We view digital platforms as partners,” wrote Gaëtan Delculée, global head of ETF, indexing and smart beta sales at Amundi, in an email to Investment Officer. He stated that the most effective models are based on complementarity: while platforms handle distribution and the client experience, asset managers provide investment expertise and product structuring.
According to Amundi, this transformation is already reflected in the development of product offerings, with greater emphasis on simple, standardized, and easily distributable solutions, whether ETFs, model portfolios, or other formats aligned with digitized investment processes. In this context, partnerships with platforms are becoming a key lever in distribution strategies. The resulting landscape is more fragmented, says Delculée, but also more dynamic. Traditional models and fast-growing digital channels coexist.
Although Europe lags behind the United States, particularly in terms of market depth and ETF penetration, the development in the two regions is comparable. What until recently was a gradual evolution is now accelerating. For asset managers, the question is no longer whether they should adapt, but how quickly they can reposition themselves in a distribution model increasingly shaped by platforms.