The present integration between production and distribution of financial products reduces the scope for exploiting the economies of scale present in asset management, attenuates the pressure of competition, increases the risk of conflicts of interest, and ultimately limits the growth of the sector and the protection of investors.
Intermediaries, and especially banks, must make asset management companies independent and permit competition in the distribution of products, so as to reduce the costs borne by investors. As in other fields, market  BIS Review 12/2007  5  initiatives are to be preferred to legislative measures; in their absence legislation or regulation will be inevitable.