Table of Contents
Introduction
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- Report scope
- Wealth market segmentation
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- Figure 1: The UK wealth pyramid, based on ownership of investable assets (excluding housing equity), 2012
- Abbreviations
- Key sources
Executive Summary
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- The market
- Size of the UK mass affluent population
- Market value
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- Figure 2: Size of the UK wealth market, by sector assets under management, 2012
- Market turnover and profitability
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- Figure 3: Size of the UK wealth market, by sector revenues and pre-tax profit, 2012
- Market factors
- Economic and investment environment
- Regulation
- Companies, brands and innovation
- Product innovation
- Leading players in the market
- Advertising activity
- Multichannel distribution mix
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- Figure 4: Frequency of using channel to access current account or other services, July 2012
- The consumer
- Age profile and asset holdings of the mass affluent
- Premium account penetration
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- Figure 5: Type of current account owned, by wealth tier, July 2012
- Reasons for not having premium account
- Owning a current account with rival banks is common
- Satisfaction with main bank provider
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- Figure 6: Level of satisfaction with main current account provider, by wealth tier, July 2012
- Top three provider attributes
- Current financial situation, prospects and goals
- What we think
Issues in the Market
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- What is mass affluent banking?
- What is the sector worth?
- How successful are banking providers at reaching the mass affluent audience?
- How can banks improve their mass affluent propositions?
- What impact could the RDR have on this market?
Trend Application
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- Highlight higher satisfaction levels to encourage more customers to upgrade to a premium account
- Develop tools to help customers monitor and meet their financial goals
- New mobile and smartphone capability is transforming the way we bank
Market Drivers
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- Key points
- Summary of the main macroeconomic indicators impacting on the banking sector
- Economic uncertainty is encouraging the wealthy to be more cautious…
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- Figure 7: Impact of economic downturn and eurozone crisis on investment attitude/approach, by wealth tier, July 2012
- …although a minority are looking for investment opportunities
- HNW clients are more likely to reconsider advice options…
- …and spread assets across a range of financial institutions
- A round-up of key legislative and regulatory developments
- FSA to be replaced
- ICB recommends retail ring-fence
- Basel III and new capital requirements
- RDR impact
- Banking industry in the spotlight
- Summary of recent tax changes affecting the wealthy
- Cut in corporation tax
Market SWOT Analysis
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- Figure 8: Premium and mass affluent banking – SWOT analysis, 2012
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Who’s Innovating?
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- Key points
- LBG and RBS restructure their wealth operations and plan to develop new propositions
- Barclays overhauls its packaged and premium offering
- Citibank explores social media banking potential
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- Figure 9: Usage of social networking sites, by wealth tier, July 2012
Market Size
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- Key points
- The mass affluent account for nearly 6% of the UK adult population
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- Figure 10: The UK wealth pyramid, based on ownership of investable assets (excluding housing equity), 2012
- Penetration of premium accounts among the mass affluent segment
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- Figure 11: Type of current account owned, by wealth tier, July 2012
- Mass affluent banks manage £501 billion in private client assets
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- Figure 12: Size of the UK wealth market, by assets under management, total revenue and pre-tax profit, 2012
- Revenues for the mass affluent banks total over £6 billion
- Sector profitability
- Methodology behind market sizing
Market Share
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- Key points
- Major bank brands dominate the mass affluent sector
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- Figure 13: Main current account provider, by wealth tier, July 2012
- LBG has the largest overall share of the wealth market
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- Figure 14: Main current account provider – shown on a group basis, by wealth tier, July 2012
- HSBC customers are most likely to have a ‘premium’ account
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- Figure 15: Type of (main or other) current account held, by provider, July 2012
- In the UK wealth management sector, Barclays Wealth and Coutts & Co remain ahead of rivals
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- Figure 16: Largest 15 wealth managers, by assets under management – UK, 2010 and 2011
Companies and Products
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- Barclays
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- Figure 17: Barclays premium current account – key features, August 2012
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- Figure 18: Barclays UK Retail and Business Banking Division – key financial data, 2010 and 2011
- Figure 19: Barclays Wealth – key financial data, 2010 and 2011
- Citibank
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- Figure 20: Citibank’s Citigold current account – key features, August 2012
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- Figure 21: Citicorp’s Global Consumer Banking division, EMEA region – key financial data, 2010 and 2011
- Clydesdale Bank
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- Figure 22: Clydesdale Bank’s premium account – key features, August 2012
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- Figure 23: Clydesdale bank Plc – key financial data, 2010 and 2011
- HSBC
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- Figure 24: HSBC Premium account – key features, August 2012
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- Figure 25: HSBC Bank Plc’s UK Retail Banking and Wealth management division – key financial data, 2010 and 2011
- Lloyds TSB
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- Figure 26: Lloyds TSB’s premium/private bank account – key features, August 2012
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- Figure 27: LBG’s Wealth and International division – key financial data, 2010 and 2011
- NatWest/RBS
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- Figure 28: RBS/NatWest premium/private bank account – key features, August 2012
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- Figure 29: RBS Group’s Wealth division – key financial data, 2010 and 2011
Brand Communication and Promotion
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- Key points
- Total adspend on banking products and services increases by 12% in the year to May 2012
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- Figure 30: Total advertising expenditure on banking and asset management products and services, by product category, 2008-12
- Barclays increases investment in promoting its Premier account
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- Figure 31: Top five advertisers of packaged/premium accounts and mass-market wealth management services, 2010-12
- Online advertising accounted for almost a fifth of total sector adspend in latest year
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- Figure 32: Share of advertising expenditure on packaged/premium accounts, by media type, 2008-12*
Channels to Market
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- Key points
- Having a large branch network is an advantage…
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- Figure 33: Number of branches belonging to the largest current account providers (shown on group basis), year-end 2011
- …but a multichannel approach is vital to appeal to an increasingly mobile and technically adroit customer base
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- Figure 34: Frequency of using channel to access current account or other services, July 2012
Profile Analysis of the Wealth Target Market
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- Key points
- Survey background
- Segmenting respondents according to wealth
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- Figure 35: Segmentation of total sample, by value of investable assets (wealth tier), July 2012
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- Figure 36: Demographic profile of wealth target market, by wealth tier, July 2012
- Asset ownership is high across wealth tiers
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- Figure 37: Pensions, investments and other assets owned by the wealth target market, by wealth tier, July 2012
Type of Current Account Held
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- Key points
- Less than a quarter of the mass affluent have a premium bank account
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- Figure 38: Type of current account owned, by wealth tier, July 2012
- Many wealthy people have more than one type of account
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- Figure 39: Type of current account owned, by top three most popular types of account, July 2012
- Mass-affluent customers need to be convinced of need for premium accounts
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- Figure 40: Reason for not having a premier or private bank account, by wealth tier, July 2012
Current Account Provider
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- Key points
- The majority of wealthy individuals hold at least two current accounts with different providers
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- Figure 41: Provider of main account and other/secondary accounts, July 2012
- Premium and private account holders are most likely to be customers of Barclays, HSBC and NatWest
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- Figure 42: Current account provider (main or other), by type of account held, July 2012
Customer Satisfaction and Key Provider Attributes
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- Key points
- Most wealthy individuals are satisfied with their main account provider…
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- Figure 43: Level of satisfaction with main current account provider, by wealth tier, July 2012
- …but there is still some room for improvement
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- Figure 44: Level of satisfaction with main current account provider, by type of account held, July 2012
- HSBC and First Direct customers are the happiest
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- Figure 45: Level of satisfaction with main current account provider, by selected banking group, July 2012
- Customers appreciate their bank providing convenient access points
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- Figure 46: Perceived attributes of main current account provider, by wealth tier, July 2012
- Provider attributes vary between different banking groups
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- Figure 47: Perceived attributes of main current account provider, by selected provider, July 2012
Financial Situation, Prospects and Goals
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- Key points
- Almost a third of wealthy individuals say that they are worse off than a year ago…
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- Figure 48: Current financial situation compared to 12 months ago, by wealth tier, July 2012
- …but there is greater optimism looking forward
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- Figure 49: Financial wealth expectations over the next 12 months, by wealth tier, July 2012
- Wealth accumulation is the most common goal among the target wealth market
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- Figure 50: Financial goals over the next 12-18 months, by wealth tier, July 2012
Appendix – Type of Current Account Held by Demographics
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- Figure 51: Type of current account held, by demographics, July 2012
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Appendix – Current Account Provider by Demographics
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- Figure 52: Provider of main or other current account held, by demographics, July 2012
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Appendix – Customer Satisfaction and Key Provider Attributes by Demographics
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- Figure 53: Level of satisfaction with main current account provider, by demographics, July 2012
- Figure 54: Perceived attributes of main current account provider, by demographics, July 2012
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Appendix – Financial Situation, Prospects and Goals by Demographics
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- Figure 55: Current financial situation compared to 12 months ago, by demographics, July 2012
- Figure 56: Financial wealth expectations over the next 12 months, by demographics, July 2012
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- Figure 57: Top five financial goals over the next 12-18 months, by demographics, July 2012
- Figure 58: Next six financial goals over the next 12-18 months, by demographics, July 2012
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