Head of Public Affairs
Nordea Wealth Management
Ahead of the TSAM Regulations & Compliance Summit, here’s a sneak preview of what you can expect from our expert speaker Jarkko Syyrilä, Head of Public Affairs at Nordea Wealth Management, before of his panel participation on ‘Future Proofing Brexit’.
Hi Jarkko, can you tell us about your background and your role at Nordea Wealth Management?
I am Head of Public Affairs so I follow European Regulatory developments in asset management and engage with EU policymakers on new regulatory initiatives. I am also Vice-Chair of ESMA Stakeholder Group and Board Member of EFAMA where I was previously Deputy Director-General before relocating back to my home country Finland. Previously I was also Director for International Relations at the IMA (nowadays IA).
It’s fair to say that there has been a significant amount happening in the geopolitical bubble of Europe in recent times. What impact do you think this has had, and will continue to have, on the asset management industry on the continent?
Asset management still has a great future as an industry, unfortunately developments such as Brexit will mean duplicating many structures and splitting operations to UK/ EU which will make us less efficient as an industry, there will be more costs. More widely, European asset managers have really benefitted from the openness of global markets so the world heading towards trade wars and protectionism is certainly a concern.
Brexit is of course one factor contributing to this, with developments (or rather, complications!), seemingly breaking every day. An important question that asset & wealth managers are contemplating currently is whether delegation of portfolio management to the UK can continue after Brexit. How can managers best prepare for the outcome amid this uncertainty?
As an industry we need to continue stressing to policymakers what a global success story the European asset management model, especially the UCITS Directive is. Being able to reach best portfolio managers wherever they are based, is a key element in this model and we need to do our utmost to preserve that model. As to preparations, I think all firms are watching developments very closely hoping for the best but preparing for the worst.
Brexit aside, Nordea’s business has been heavily impacted by PRIIPs since its implementation back in January. What have you found to be the main challenges it has posed so far, and how have you combated them?
It is a generally held view among asset managers that PRIIPs is largely a failure, providing the investors with misleading information which could have a damaging impact on the image of our industry. We are trying to explain investors what these new figures mean, but we need the Commission and ESMA to act to get quick adjustments to the regime to make it more meaningful. Especially the negative transaction costs clearly show the methodology is flawed.
What have been your other main regulatory challenges in 2018? Is there anything on the horizon that you see taking up most of your time & resources heading towards 2019?
The EU Commission Action Plan on Sustainable Finance in March followed by the Commission legislative proposals in May suggest a sea change in terms of the approach in financial regulation. For asset managers this means a lot more disclosure on ESG and financial advisers will need to have more focus on ESG in the advisory process. Whilst the overall aim of finance becoming more sustainable is certainly laudable, we need to get the details right and that means a lot of work for all of us.
Finally, the role, and relative power, of the respective regulatory bodies & associations across Europe is a topic that is becoming increasingly open for debate in these uncertain times. What are your thoughts on this?
I believe that whilst European regulators such as ESMA have an increasingly important role to play in driving towards more supervisory convergence in Europe, the national competent authorities will still be the backbone in fund authorisation, regulation and supervision. The NCAs have the local knowledge and competences which are needed to protect the investors.