While North America’s investors and distributors have barely tapped into cross-border funds, Europe is now dominating the cross-border distribution of funds. The Undertakings for Collective Investment in Transferable Securities (UCITS) regime is enabling global reach and becoming a popular investment option for retail investors.
Moreover, investor preferences are evolving, with clients seeking global diversification. According to Broadridge, 65% of financial advisors globally now recommend international or cross-border funds as part of client portfolios, particularly in the HNW segment where diversification and multi-jurisdictional exposure are priorities. This is creating an urgency today for US broker-dealers to broaden their vision beyond US-only products.
Strategic options for US broker-dealers
Amidst these forces, US broker-dealers and wealth management platforms must decide how to adapt to stay competitive in the market. While they are trying to achieve global fund access, they can either build an in-house network or partner with an existing platform. The right choice depends on the firm’s size, capabilities, and risk appetite.
Investor expectations are also instrumental in shaping fund access and distribution priorities as illustrated in Exhibit 1
Building a global fund network in-house means creating their own connection to foreign funds and markets. Enabling access to global funds can significantly improve client acquisition and retention, particularly among high-net-worth individuals and globally minded investors who expect diversified options.
With this approach, a broker-dealer would internally develop the infrastructure to support international fund trading such as establishing relationships and data links with overseas fund managers or their transfer agents, handling multi-currency settlement and foreign exchange (FX), and ensuring compliance with each relevant jurisdiction’s regulations.
This route offers complete control over customer experience and product set. The firm can tailor the platform to its needs, integrate tightly with its core systems, and innovate with proprietary features. However, the initial investment to enable technology development, legal/regulatory setup in each market, and organize operational teams is high and time-to-market is slow. The firm is also responsible for all ongoing maintenance, from software updates to monitoring foreign regulatory changes.
The alternative is to leverage existing platforms such as Allfunds, Clearstream’s Vestima, and Euroclear’s FundsPlace. These platforms provide broker-dealers with access to a diverse universe of investment products. As of 2024, Allfunds manages over €1.56 trillion in assets under administration (AuA), offering access to 150,000 160,000 funds from nearly 3,000 fund houses across mutual funds, ETFs, multi-asset, and alternative strategies.
Euroclear supports over 250,000 funds and manages nearly €3.6 trillion in AuA, connecting 3,000 distributors and 2,500 fund managers across 21 global offices. Clearstream similarly handles over 230,000 funds, processing more than 45 million fund transactions annually across 55-60 markets. These platforms serve as a critical infrastructure for broker-dealers seeking scale globally, offering a one-stop access to traditional UCITS, ETFs, hedge funds, and emerging private market funds.
By partnering, a US broker-dealer gets to rapidly offer clients a broad menu of offshore funds without reinventing the wheel. The platform handles heavy lifting by maintaining the fund contracts, streamlining order routing, settlement, tax and compliance processing across markets. While the broker must largely conform to the platform’s standards and user interface and there is increased reliance on a third-party, the benefits include shorter time-to-market, lower upfront costs, and reduced operational complexity.
However, a typical integration path for these involves onboarding the distributor onto the platform, establishing KYC/AML and due diligence protocols, integrating order routing, and enabling fund settlement and reporting flows.
It entails navigating complex regulatory frameworks, including restrictions on offering offshore funds to US clients and varying cross-border compliance requirements. Operationally, enterprises must adapt to diverse workflows, multi-currency settlements, and unique reporting standards across jurisdictions.
Technologically, legacy systems often lack compatibility with modern APIs and protocols such as FIX, requiring middleware, integration layers, and robust cybersecurity. These challenges make integration a resource-intensive process, especially for firms with outdated infrastructure. Broker-dealers need modular and scalable solutions for integration with these platforms to reduce operational overheads, accelerate time-to-market, and launch new global fund offerings with minimal risk and cost.
In practice, these options are not mutually exclusive. A large firm might choose a hybrid approach, building certain capabilities in-house while using a platform for specific markets or asset classes. Firm maturity and risk appetite are key in making the decision. Building entails execution risk and long payback period, whereas partnering involves vendor risk and less differentiation. The common thread is that standing still is no longer a viable option and doing nothing leaves a firm offering only US funds in a world where investors want more.
Here, exhibit 2 illustrates a comparison between the build and partner model for US broker-dealers
Toward a solution-led future through integration and innovation
Regardless of the strategic path chosen, success will depend on a solution-led approach and leveraging modern technology and integration to deliver a seamless global fund experience. At the core of the solution is integration. Broker-dealers will need to integrate their systems for order management, client portals, compliance modules with external fund platforms and market infrastructure.
Modern integration solutions should enable broker-dealers to overcome legacy infrastructure barriers and rapidly access global fund platforms through non-intrusive, plug-and-play architectures. Instead of overhauling core systems, enterprises can deploy API-based connectors, middleware, and cloud-native layers that bridge legacy back-end engines with these platforms. These wrappers translate between legacy formats and modern protocols, allowing seamless trade execution, reporting, and compliance workflows in real time.
Prebuilt integration modules, testing sandboxes, and secured digital interfaces minimize disruption, reduce implementation timelines, and allow firms to expand their product shelf without heavy technology investment. This integration-based strategy should be built on cloud-native architecture for flexibility and scalability. Compliance workflows are also crucial in cross-border fund distribution.
Embedding AI and data analytics in these systems can enhance distribution by understanding investor needs and matching them to suitable funds across the global spectrum, effectively personalizing product selection from a huge catalog.
Exhibit 3 illustrates the tiered revenue model for mutual funds, highlighting how firms can move from transactional flows toward higher-value services such as data, advisory, and infrastructure licensing