Table of Contents
Introduction
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- Report scope and definitions
- Abbreviations
- Key sources
Executive Summary
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- The market
- Industry revenues expected to grow in 2013 and following five years
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- Figure 1: Forecast of wealth management industry revenues – fan chart, 2008-18
- Segment performance
- Discretionary management leads the way
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- Figure 2: Investment assets held by wealth managers, by mandate type, 2008-12
- Portfolio composition
- Market factors
- Economic recovery finally getting underway
- FTSE 100 performing well
- The FCA announced a supervision model for the wealth management industry
- Impact of the RDR
- Companies, brands and innovation
- Coutts overtake Barclays to take top spot
- Adspend on wealth management products and services down by 8% in 2012/13
- The consumer
- Investment portfolio
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- Figure 3: Saving and investment product ownership, August 2013
- Saving and investing goals
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- Figure 4: Saving and investment goals, August 2013
- Investment decisions
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- Figure 5: Investment management and decision making, August 2013
- Sources of financial advice
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- Figure 6: Sources of advice when taking out an investment product, August 2013
- Awareness of RDR changes
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- Figure 7: Consumer awareness of RDR changes, August 2013
- What we think
Issues in the Market
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- How is the RDR affecting the wealth management industry?
- What drives saving and investing activity among affluent consumers?
- How can firms target the affluent consumers of the future?
- Could advertising play a bigger role in the wealth management sector?
Trend Application
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- Rising to the top
- Short-term pain for long-term gain
- Mintel futures: Old Gold
Market Drivers
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- Key points
- Market indices performing well in 2013
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- Figure 8: FTSE 100 and FTSE All-Share – daily index movements, January 2005-August 2013
- Market capitalisation up by 15% in 2012
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- Figure 9: Market capitalisation of global stock exchanges, by region, 2009-13
- UK economy showing signs of recovery
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- Figure 10: UK quarterly GDP growth, Q1 2006-Q3 2013
- Consumer confidence continues to grow
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- Figure 11: UK consumer confidence, January 1989-October 2013
- RDR already having an impact in the wealth management arena
- Wealth managers and private banks come under the eye of the FCA
- Basel III brings new capital requirements
- MIFID II and resolution of potential conflict with the RDR
SWOT Analysis
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- Figure 12: Wealth management market – SWOT analysis, 2013
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Who’s Innovating?
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- Key points
- Finding the right wealth manager for your personal needs
- Barclays continues to develop its execution platform for wealth managers
- Little Book of Wonders launched for HNW clients
- Developments for HNW clients
Market Size and Forecast
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- Key points
- Wealth management market continues to grow
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- Figure 13: Size of the UK wealth management sector, by number of clients, value of assets and total revenues, 2008-12
- Net new assets down in 2012
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- Figure 14: Investment asset growth and net new business for wealth managers, 2009-12
- Market forecast
- Industry revenues expected to increase 19% over the next five years
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- Figure 15: Forecast of wealth management industry revenues – fan chart, 2008-18
- Figure 16: Forecast of wealth management industry revenues, at current and constant prices, 2008-18
- Forecast methodology
- Fan chart explanation
Segment Performance
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- Key points
- Wealth management firms grow assets and number of accounts
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- Figure 17: Number of accounts and the value of assets managed, by type of firm, 2009-12
- Share of total revenues remains unchanged in 2012
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- Figure 18: Total wealth management industry revenues, by type of firm, 2009-12
- Commission earning declined in 2012
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- Figure 19: Proportional distribution of revenue streams, by type of firm, 2011 and 2012
- Costs as a proportion of revenues fall for wealth management firms
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- Figure 20: Operational costs as a proportion of revenue, by type of firm, 2009-12
- Profitability among wealth management firms up in 2012
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- Figure 21: Profit margin, by type of firm, 2009-12
Portfolio Composition
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- Key points
- Number of client accounts up by 5% in 2012
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- Figure 22: Number of wealth manager accounts/portfolios, by value band (nominee accounts only), 2012
- Asset allocations remains relatively unchanged in 2012
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- Figure 23: Proportional distribution of assets, by type of asset class, 2008-12
- Taxable holdings remain the most widely held asset type
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- Figure 24: Proportional distribution of assets, by ownership, 2012
Market Share
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- Key points
- Coutts and Barclays account for over 20% of assets under management
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- Figure 25: Largest 15 wealth managers, by assets under management and number of client accounts – UK, 2011 and 2012
Companies and Products
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- Coutts & Co
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- Figure 26: RBS Group’s Wealth division – key interim data, H1 2012 and H1 2013
- Figure 27: RBS Group’s Wealth division – key financial data, 2011 and 2012
- Barclays Wealth and Investment Management
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- Figure 28: Key interim financial data for Barclays Wealth and Investment management, H1 2012 and H1 2013
- Figure 29: Barclays Wealth – key financial data, 2011 and 2012
- St. James’s Place Wealth Management
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- Figure 30: St James’s Place Wealth Management – key interim data, H1 2012 and H1 2013
- Figure 31: St James’s Place Wealth Management – key annual data, 2011 and 2012
- UBS Wealth Management
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- Figure 32: UBS Wealth Management division (Europe and Asia) – key interim data, H1 2012 and H1 2013
- Figure 33: UBS Wealth Management division (Europe and Asia) – key annual data, 2011 and 2012
- Brewin Dolphin
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- Figure 34: Brewin Dolphin – key interim data, H1 2012 and H1 2013
- Hargreaves Lansdown
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- Figure 35: Hargreaves Lansdown – key annual data, 2012 and 2013
- HSBC Private Bank
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- Figure 36: HSBC Private Bank – key interim data, H1 2012 and H1 2013
- Figure 37: HSBC Private Bank – key annual data, 2011 and 2012
Brand Communication and Promotion
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- Key points
- Advertising on wealth management services and products is relatively small
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- Figure 38: Total advertising expenditure on wealth management and other related products and services, 2010/11-2012/13
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- Figure 39: Top ten advertisers of wealth management products and services, 2010/11-2012/13
- Press and outdoor media lead the way in the wealth management sector
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- Figure 40: Proportional distribution of adspend on wealth management, by media type, 2010/11-2012/13
- A note about adspend
Channels to Market
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- Key points
- Over 50% of accounts are under discretionary management…
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- Figure 41: Number of client accounts/portfolios, by mandate type, 2008-12
- Discretionary management accounts for an even higher percentage of AUM
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- Figure 42: Investment assets held by wealth managers, by mandate type, 2008-12
- Revenue returns continue to seesaw
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- Figure 43: Revenue return on discretionary and advisory assets, 2007-12
Segmentation of Investable Assets
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- Key points
- Survey coverage
- Wealth tiers among affluent consumers
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- Figure 44: Segmentation of the affluent market, by value of investable assets, August 2013
- Growing personal wealth over time
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- Figure 45: Segmentation of the affluent market, by value of investable assets, August 2013
- Meeting the investable assets criterion
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- Figure 46: Segmentation of the affluent market, by value of investable assets, August 2013
- Inheriting the next generation of affluent and HNW consumers
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- Figure 47: Segmentation of the affluent market, by value of investable assets, August 2013
Investment Portfolio
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- Key points
- Affluent clients tend to save/invest in a range of products
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- Figure 48: Saving and investment product ownership, August 2013
- A quarter of affluent consumers invest in property
- Affluent and HNW clients have fingers in many pies
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- Figure 49: Saving and investment product ownership, by segmentation of the affluent market, August 2013
Saving and Investing Goals
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- Key points
- Retirement is the number one financial priority
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- Figure 50: Saving and investment goals, August 2013
- Circumstances dictate saving and investment goals
- Affluent and HNW clients most likely to save/invest for tax mitigation and inheritance planning
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- Figure 51: Saving and investment goals, by segmentation of the affluent market, August 2013
Investment Decisions
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- Key points
- One in two affluent consumers makes their own investment decisions
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- Figure 52: Investment management and decision making, August 2013
- Adults who own more complex products tend to delegate investment decisions
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- Figure 53: Investment management and decision making, by ownership of unit trust/OEICs, property and corporate bonds/bond futures/gilts/gilt funds, August 2013
Sources of Financial Advice
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- Key points
- IFAs the top source of financial advice
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- Figure 54: Sources of advice when taking out an investment product, August 2013
- Affluent and HNW clients more likely to seek advice from private banks
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- Figure 55: Sources of advice when taking out an investment product, by segmentation of the affluent market, August 2013
Awareness of RDR Changes
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- Key points
- Around 80% of affluent clients have heard about the RDR
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- Figure 56: Consumer awareness of RDR changes, August 2013
- Affluent & HNW clients most likely to be aware about the RDR
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- Figure 57: Consumer awareness of RDR changes, by segmentation of the affluent market, August 2013
- More can be done to boost customer awareness
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- Figure 58: Consumer awareness of RDR changes, by sources of advice when taking out an investment product, August 2013
- Ownership of certain products leads to increased awareness
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- Figure 59: Consumer awareness of RDR changes, by ownership of select investment products, August 2013
Attitudes Towards Investing and Financial Risk
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- Key points
- Affluent consumers like the challenge of making the most of their money…
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- Figure 60: Attitudes towards investment risk, August 2013
- …but a large number also prefer to have peace of mind over higher returns
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- Figure 61: Attitudes towards having lower investment risk, August 2013
- Risk attitudes change among the three wealth tiers
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- Figure 62: Agreement with the statement ‘I’ve tended to avoid taking financial risks in the past’, by segmentation of the affluent market, August 2013
- Patience and a long-term outlook can help during turbulent times
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- Figure 63: Agreement with the statement ‘If I lost money on an investment, I would stay investment and hope that the investment recovers over time’, August 2013
Appendix – Market Size and Forecast
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- Figure 64: Best and worst case forecast of wealth management industry revenues, 2013-18
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Appendix – Segmentation of Investable Assets
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- Figure 65: Segmentation of the affluent market, by value of investable assets, August 2013
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Appendix – Investment Portfolio
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- Figure 66: Most widely owned saving and investment products, August 2013
- Figure 67: Saving and investment products, August 2013
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- Figure 68: Least owned saving and investment products, August 2013
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Appendix – Saving and Investing Goals
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- Figure 69: Most important saving and investment goals, by demographics, August 2013
- Figure 70: Less important saving and investment goals, by demographics, August 2013
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Appendix – Investment Decisions
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- Figure 71: Investment management and decision making, by demographics, August 2013
- Figure 72: Investment management and decision making, by segmentation of the affluent market, August 2013
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Appendix – Sources of Financial Advice
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- Figure 73: Sources of advice when taking out an investment product, by demographics, August 2013
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Appendix – Awareness of RDR Changes
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- Figure 74: Consumer awareness of RDR changes, August 2013
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Appendix – Attitudes Towards Investing and Financial Risk
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- Figure 75: Agreement with the statement ‘I like the challenge of trying to make the most of my money’, by demographics, August 2013
- Figure 76: Agreement with the statement ‘I’m prepared to take some risks with my savings and investments in the hope of earning higher returns’, by demographics, August 2013
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- Figure 77: Agreement with the statement ‘I’d rather take a few risks with my investments than watch their real value reduced by inflation’, by demographics, August 2013
- Figure 78: Agreement with the statement ‘If I lost money on an investment, I would stay invested and hope that the investment recovers over time’, by demographics, August 2013
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- Figure 79: Agreement with the statement ‘I’m happy to make a lower return on my savings if it means I don’t have to lie awake at night worrying about investment risk’, by demographics, August 2013
- Figure 80: Agreement with the statement ‘I’ve tended to avoid taking financial risks in the past’, by demographics, August 2013
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- Figure 81: Agreement with the statement ‘Even if a risky investment offered higher returns, it wouldn’t compensate for the amount of worry it’d cause me’, by demographics, August 2013
- Figure 82: Agreement with the statement ‘I think that I’m more willing than most people to take financial risks’, by demographics, August 2013
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- Figure 83: Agreement with the statement ‘I’d rather have money in the bank now than the chance of high returns in the future’, by demographics, August 2013
- Figure 84: Agreement with the statement ‘I’d be prepared to borrow money to make a financial investment’, by demographics, August 2013
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