Table of Contents
Introduction and Abbreviations
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- Scope of the report
- History
- Context
- Concepts
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- Figure 1: Socio-economic spectrum of wealth use
- Strategic alignment
- Risk management
- Access
- Pound-cost averaging
- Liquidity
- Global information and research
- Special note on terminology
- Definitions
- Consumer research
- ACORN
- Abbreviations
Premier Insight
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- Figure 2: Collective investments, summary of forces influencing the market, June 2005
- Unstoppable forces
- Make it relevant to me
- Bet you didn’t know this
- Your friendly local shop
- Tell me more
- You don’t know your own strength
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Executive Summary
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- Background considerations
- Industry issues
- Market size
- The consumer
- Future development
International Context
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- The United States
- Continental Europe
- Asia
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- Figure 3: Economic comparison of selected Asian countries and the United Kingdom, May 2005
Market Drivers
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- Emotion
- Confidence
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- Figure 4: Central position of confidence in consumers’ attitudes to investment
- Maturity of investment outlook
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- Figure 5: Investment outlook maturity model
- Corporate scandals
- Economics
- Market volatility
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- Figure 6: FTSE 100 and FTSE All Share indices, daily prices, January 1996-March 2005
- Interest rates – real and imaginary
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- Figure 7: Bank of England base rate, January 1992-May 2005
- Consumer demand
- Employment
- Socio-demographics
- Population growth
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- Figure 8: Forecast United Kingdom population, 1999-2010
- Getting richer
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- Figure 9: Estimated socio-demographic composition of United Kingdom population, 2000-10
- Immigrant culture
- Politics
- International security
- Oil
- Tax reforms
- Regulation
- Product regulation
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- Figure 10: Representative value chain for unit trust management
- Distribution regulation
- Depolarisation changing the landscape
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- Figure 11: Schematic for revised regulatory regime for retail financial product distribution, May 2005
- Figure 12: Provider and distributor mapping to new regulatory regime, May 2005
- European regulation
Market Size
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- Figure 13: Reference model for participation in collective investments
- Unit trusts and OEICs
- A switch to fixed income
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- Figure 14: Unit trust/OEIC funds under management, by asset class, £ billion, 1995-2004
- Sales are rising but so are repurchases
- Long-term growth resumed…
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- Figure 15: Long-term annual sales of unit trusts and OEICs, £ million, 1995-2004
- …but with short-term uncertainty
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- Figure 16: Short-term monthly sales of unit trust/OEICs, £ billion, 2001-05
- Investment trusts
- Asset values recovering…
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- Figure 17: Market capitalisation of investment trusts, 1995-2004
- …but too early to predict new issue renaissance
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- Figure 18: Annual value of new issues for investment companies, 1998-2004
- Numbers of customers
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Products
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- Figure 19: Vehicles available for collective investment, May 2005
- Product types
- Mainstream products
- Investment trusts
- Unit trusts
- Open-ended investment companies (OEICs)
- Special products
- Split-capital investment trusts
- Derivative vehicles
- Exchange Traded Funds
- Venture Capital Trusts
- Other products
- Investment clubs
- Family trusts
- Hedge funds
- Special note on individual companies
- Special note on fund supermarkets
- Sector analysis
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- Figure 20: Typical collective investment specialisations, May 2005
- Changing fashions
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- Figure 21: Top 10 Investment Management Association sectors, ranked by net retail sales, 2001-05
- Discounts getting shallower
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- Figure 22: Leading investment trust sectors and discounts to net asset value, May 2004 and 2005
- Recent trends
- On the catwalk now
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Key Players
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- Steady progress in unit trusts
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- Figure 23: Top 10 unit trust/OEIC providers by funds under management, 2003-05
- Mainly fair weather for investment trusts
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- Figure 24: Top 10 investment trusts, by total assets, 2004-05
Distribution
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- Figure 25: Gross retail sales of unit trusts and OEICs, by distribution channel, 2001-05
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- Figure 26: Net retail sales of unit trusts and OEICs, by distribution channel, 2005
- Consumer apathy
- Funds supermarkets
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Advertising and Promotion
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- Activity overall
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- Figure 27: Collective investments, distribution of advertising expenditure by media, year to March 2005
- Normalisation of values
- Investment trusts
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- Figure 28: Collective investments, investment trust advertising expenditure, top 10 advertisers, years to March 2004 and 2005
- Unit trusts
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- Figure 29: Collective investments, unit trust advertising expenditure, top 10 advertisers, years to March 2004 and 2005
- A paradox
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- Figure 30: Collective investments, top 10 advertisers, comparison of advertising expenditure between unit trusts and investment trusts, year to March 2005
- Analysis of marketing communications
Consumer Financial Activity
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- Consumers are looking to refresh their finances
- Relationship with the main financial services providers (MFSP)
- Activity levels set to rise in the 6 months from March 2005
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- Figure 31: Savings, investment, borrowing and debt repayment – consumers’ expected activity, December 2003-March 2005
- Those aged 30-39 will be most active over the next few months
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- Figure 32: Expected financial activity by socio-demographic and income groups, March 2005 and average for the last thirteen quarters
- Consumers looking to build up savings
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- Figure 33: Leading financial activities planned in the next 6 months, March 2004-March 2005
- Mixed messages on housing activity
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- Figure 34: Intended mortgage and property purchase activity, December 2002-March 2005
- Lloyds TSB increases leading market share position
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- Figure 35: Leading main financial services providers: market shares, March 2004-March 2005
- RBS and Nationwide should boost their savings business
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- Figure 36: Saving, investment and lending, market sizes by expected customer demand and brand leaders (overall % intending to undertake activity in brackets), March 2005
- Bank of Scotland has the most ‘active’ customers
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- Figure 37: Activity levels of main financial providers’ customer bases, March 2005
The Consumer
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- Ownership of products
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- Figure 38: Collective investments, overall product ownership, June 2005
- Cross-holdings reflect relative sophistication
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- Figure 39: Collective investments, cross holdings between categories, June 2005
- A sophistication hierarchy
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- Figure 40: Tentative typology of collective investors, June 2005
- Caveat
- Friendly unit trusts
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- Figure 41: Collective investments, product ownership overall and by gender, age and socio-economic group, June 2005
- Implications
- The Capital Effect
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- Figure 42: Collective investments, product ownership overall and by TV region, June 2005
- Implications
- Family pressures
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- Figure 43: Collective investments, product ownership overall and by own children in household, lifestage and Special Groups, June 2005
- Implications
- Equal opportunities
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- Figure 44: Collective investments, product ownership overall and by ACORN group and gross annual household income, June 2005
- Implications
- Media usage
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- Figure 45: Collective investments, product ownership overall and by technology use, newspaper readership and commercial television watching, June 2005
- Implications
- A share of the turf?
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- Figure 46: The Gambler, characteristics of gamblers, by selected attributes, July 2004
- Shopping habits
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- Figure 47: Collective investments, product ownership overall and by supermarket used, June 2005
- Implications
- Factors to consider
- Bruised egos in the City
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- Figure 48: Collective investments, factors for consideration, first six responses, overall and by gender, age group and socio-demographic group, June 2005
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- Figure 49: Collective investments, factors for consideration, last six responses, overall and by gender, age group and socio-economic group, June 2005
- Implications
- General observation
- Regions not easy to read
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- Figure 50: Collective investments, factors for consideration, top eight responses, by television region, June 2005
- Implications
- Summary of other analyses
- Sources of information
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- Figure 51: Collective investments, sources of information, first seven responses, overall and by gender, June 2005
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- Figure 52: Collective investments, sources of information, last seven responses, overall and by gender, June 2005
- Implications
- Big trends influence behaviour
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- Figure 53: Collective investments, sources of information, first seven responses, overall and by age and socio-economic group, June 2005
- Implications
- Regions hard to read again
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- Figure 54: Collective investments, sources of information, first seven responses, overall and by TV region, June 2005
- Implications
- Capacity drives interest
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- Figure 55: Collective investments, sources of information, first seven responses, overall and by selected working status, marital status and lifestage breaks, June 2005
- Implications
- Telegraph readers outdo the techies
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- Figure 56: Collective investments, sources of information, first seven responses, overall and by technology use and newspaper readership, June 2005
- Implications
- The wealth-time-trust equation
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- Figure 57: Collective investments, sources of information, first seven responses, overall and by ACORN group, June 2005
Consumer Attitudes and Targeting Opportunities
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- Conservative Brits
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- Figure 58: Collective investments, attitudes to risk, overall and by gender, age and socio-economic group, June 2005
- Implications
- Grown-up Scots
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- Figure 59: Collective investments, attitudes to risk, overall and by TV region, June 2005
- Implications
- Family preoccupation
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- Figure 60: Collective investments, attitudes to risk, overall and by selected marital status, own children in household and lifestage, June 2005
- Implications
- Guardian-reading chancers
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- Figure 61: Collective investments, attitudes to risk, overall and by newspapers read and hours of commercial television watched, June 2005
- Implications
- Shopping habits confirm investing habits
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- Figure 62: Collective investments, attitudes to risk, overall and by supermarkets used, June 2005
- Implications
- The smell of burned fingers
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- Figure 63: Collective investments, statements on investment products, overall and by gender, first seven responses, June 2005
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- Figure 64: Collective investments, statements on investment products, overall and by gender, last seven responses, June 2005
- Implications
- Head vs. heart for ABs
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- Figure 65: Collective investments, statements on investment products, overall and by age and socio-economic group, first seven responses, June 2005
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- Figure 66: Collective investments, statements on investment products, overall and by age and socio-economic group, last seven responses, June 2005
- Implications
- Other observations
- Further statistical analysis
- Support for qualitative typologies
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- Figure 67: Collective investments, results of quantitative analysis of consumer types, overall and by gender, Special Groups and ACORN group, June 2005
- The power of the press
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- Figure 68: Collective investments, correlation matrix for sources of advice, June 2005
A Picture of the Collective Investor
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- Who are they?
- Information Guzzlers
- Chancers
- Rentiers
- Scots
- Little people
- Women
- How many of them are there?
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- Figure 69: Insight value group typology (applicable to industrialised nations), 2004
- With whom do they bank?
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- Figure 70: Collective investments, penetration of investment types by type of bank and selected major banking groups, ranked by direct equity ownership, June 2005
- Implications
Industry Views
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- Distribution
- Attitudes to risk
The Future
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- Attitudes to risk need to change
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- Figure 71: Industry-wide communication programme for collective investments, 2005
- Collective investments at a crossroads
- The view from the markets
- The broader picture
- Implementation
Forecast
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- Figure 72: Forecast of the long-term annual gross retail sales of unit trusts and OEICs combined, 2005-10
- Market growth is encouraging
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- Figure 73: Actual and expected pattern of long-term annual gross retail sales of unit trusts and OEICs, 1995-2010
- Trust: the number one issue to be addressed
- Factors used in the forecast
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