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2014 Mutual Fund Outlook: Innovating around the edges


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2014 finds the mutual fund industry in an enviable spot. Mutual fund firms have steadily added new assets while navigating a slippery regulatory terrain. Having grasped this balance, mutual fund firms are now looking to up their game. Much like speed skaters in search of that extra edge that will put them ahead of the pack, mutual fund leaders are innovating around the margins and experimenting with new products to help them develop a competitive advantage.

These new forays are placing additional importance on oversight and compliance frameworks as slips in execution could prove costly. We are seeing a first wave of mutual fund firms embracing risk-based resource models in order to gain a holistic view of risk within their organization and align resources to address this added complexity. At the same time, risk and compliance leaders are increasingly taking part in business development and other planning discussions, adding valuable insight into strategic decisions.

Of course, mutual fund firms will have to manage these growth-related risks while they remain responsive to regulators who are ratcheting up their enforcement efforts and standing on the cusp of imposing new requirements. Missteps are not an option and mutual funds firms will need to keep a close eye on Washington as some key issues remain unsettled.

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2014 Mutual Fund Outlook: Innovating around the edges

  1. 1. 2014 MUTUAL FUND OUTLOOK: Championing growth 2014 MUTUAL FUND PRIORITIES NAVIGATING THE REGULATORY REGIME IN 2014 New products to meet investor demands • Investor preferences will continue to change, prompting mutual funds to consider new product offerings • There will likely be increased focus on specialized ETFs — both active and indexed — going forward • Industry asset growth could get a boost soon from the launch of re-engineered active ETF products • Liquid alternative products will continue to attract retail investors in the year ahead Balancing risk with growth Staying in front of regulatory flux • The industry’s growth, new product offerings, and global expansion is exposing mutual fund firms to a more complex array of risks. • Risk and compliance executives will likely play a greater role in business development efforts so they can better understand the risk implications of new business ventures • Mutual funds will continue to face a variety of risks associated with their reliance on service providers, with an increased focus on omnibus practices • Mutual funds will need to stay on the right side of regulators who are enforcing new rules with renewed vigor • Money market fund regulation will be the big regulatory event for 2014 • Mutual funds will need to contend with added complexity brought on by the increasing involvement of the Financial Stability Oversight Council and the Department of Labor in industry rulemaking Copyright © 2014 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited Money market fund changes SIFI designations Fair valuation guidance Fiduciary duty requirements Omnibus intermediary oversight Staying in front of the regulatory flux POLL QUESTION: For 2014, which will have the greatest impact on your business? Money market fund changes SIFI designation Fiduciary duty requirements Omnibus intermediary oversight Fair valuation guidance 21% 5% 22% 9% 43% SOURCE: DELOITTE DBRIEFS, 2014 INVESTMENT MANAGEMENT OUTLOOK, JANUARY 14, 2014 Contact To learn more about the Deloitte Center for Financial Services, its solutions, thought leadership, and events please visit: Contact To receive email communications, please register at: Engage Follow us on Twitter at: @DeloitteFinSvs For more information or to download the full 2014 mutual fund outlook visit: Deloitte Center for Financial Services The Deloitte Center for Financial Services offers actionable insights to assist senior-level executives in the industry to make impactful business decisions.