Europe might still baffle diplomats, but it doesn’t have to confuse investors, says Novia Global’s Linda Johnstone. In her latest blog for IFA Magazine, Linda highlights how, as the continent’s financial patchwork becomes ever more complex, international platforms are stepping up to stitch it all together, offering clarity, simplicity and smarter solutions for advisers navigating this diverse landscape.
Renowned US statesman Henry Kissinger reputedly once asked: “Who do I call if I want to talk to Europe?” The remark was originally a dig at the region’s mishmash of foreign policies, but it has since come to encapsulate a broader failure to achieve genuine integration and uniformity.
There is renewed US pressure to demonstrate a united front today. Donald Trump’s unyielding “America first” agenda is compelling European nations to cooperate and collaborate to an extent arguably not witnessed in decades.
For many investors, though, the picture is still confusing. They continue to see Europe as a patchwork of opportunities, threats and trends – some largely confined to specific countries, others more far-reaching.
In tandem, there remains a widespread perception among expats and other internationally mobile groups that investing overseas can be unusually difficult. It is still common to suppose the process is complicated, costly and perhaps even less than dependable.
Such views may have carried weight in the past. But now, in my opinion, they carry little or none – at least in the context of international investment platforms’ continued rise.
A market demanding simplification and accessibility
According to a survey of its major economies, Europe is home to around 113 million investors. There are 26 million in Germany alone. Italy and France have 15 million each, while Spain has 11 million[1].
Overall, more than a third of the continent’s adult population are investors. Millions more plan to join the fray in the near future. Individual stocks and shares are the most popular choice, with investment/mutual funds second and exchange-traded funds experiencing the most rapid growth of all[2].
To put it mildly, this should be music to the ears of all kinds of financial services providers. So where do platforms fit in?
As a representative of an international platform that now has a permanent presence in the European Union (EU), I obviously feel they have a big role to play. To understand why, it is helpful to examine the same survey’s insights into the concerns that deter investing across Europe.
The main barriers include fear of losses, a general lack of investment knowledge and insufficient awareness of the likely long-term benefits of market participation[3]. In other words, many people simply do not understand why or how they should invest. I believe this is where the appeal of platforms enters the reckoning.
Giving advisers and investors what they need
Take the issue of complexity. With Europe, as with any region, even professional advisers might struggle to make sense of the investment landscape and the dynamics that constantly reshape it.
Yet international platforms can bring welcome clarity to the challenge of sorting the wheat from the chaff. Like their domestic counterparts, they have redefined what is possible in this respect.
Technology is key, of course. An ability to assemble, organise and streamline the wealth of information required to make informed investment decisions is one of platforms’ principal attractions.
This “heavy lifting” should entail seamless access to a range of funds, DFMs and MPS providers. A fundamental goal is to give users everything they need and want – all through a single, easy-to-use portal.
In turn, this should translate into value, efficiency, transparency and security. Such attributes are a long way removed from the outdated notions of unreasonable fees, incomprehensible structures and illiquid assets which still dominate some investors’ assumptions.
Regulation as a competitive edge
A final factor worth bearing in mind here is regulation. In this regard, contrary to Kissinger’s rhetoric, Europe offers a pretty level playing field – one from which platforms can be well placed to benefit.
Recently, in preparation for our own European launch, we earned full authorisation under MiFID II. Compliance with this epic reel of red tape is no mean feat, as anyone familiar with the undertaking will know, but it serves as an essential bedrock for operating in the EU.
Generally speaking, whatever their markets might be, the best platforms are highly regulated. Keeping pace with the succession of edicts handed down from above can be tough and extremely resource-intensive, but it is central to how to we do business in multiple jurisdictions.
Crucially, it can also be a powerful point of differentiation. Financial services providers of every ilk frequently think of regulatory conformity as a burden, yet for advisers and clients it is increasingly recognised as a source of competitive advantage.
“Who do I call if I want to talk to Europe?” might still be a question that confounds America’s diplomats today. But the answer for investors should be rather more straightforward.
Linda Johnstone is Novia Global’s Head of Investment Proposition.
[1] See, for example, BlackRock: “People & money: the trends shaping investing in Europe”, October 2024 – https://www.blackrock.com/uk/literature/brochure/people-and-money-infographic-emea.pdf.
[2] Ibid.
[3] Ibid.
