"I'm worried that an unhelpful divide is developing in Europe's fund management industry," says Wolfgang Mansfeld. Mansfeld heads Brussels' Fédération Européenne des Fonds et Sociétés d'Investissement, an association of national fund trade groups whose proposed merger with the European Asset Management Association fell apart last month -- whereupon EAMA fell apart, too.

The dividing issue: how aggressively to push for uniform European regulation of asset management. Mansfeld's FEFSI was for holding back; EAMA, whose erstwhile members included Allianz, AXA, Fidelity and 25 other big fund companies, wanted to move ahead. Their executives griped that FEFSI, which represents national fund associations, was trying to stall pan-European rules to protect local monopolies.

"We've come to realize they won't necessarily push the uniform fund regulation agenda as aggressively and with as little accompanying red tape as corporates [big fund companies] will," says Klaus Mössle, head of institutional business for Fidelity in Germany and Austria and a former EAMA president. The big fund outfits plan to form a new group. FEFSI members, meanwhile, feared that the "corporates" would "lock them out of creating the group's agenda," says Mansfeld.

The upshot is a disunited front on fund regulation. "We now face the risk of seeing progress toward a pan-European market actually slow if rival organizations push similar but separate agendas," laments Mansfeld, 53, an executive board member of Union Investments in Frankfurt. Still, he's relieved the talks are over. "It has not been the easiest of years," he says.