Table of Contents
Introduction
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- Abbreviations
- Definitions
- Retail investment products
- Independent financial advice guidance – post-RDR
- Restricted advice – post-RDR
Executive Summary
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- The market
- Number of DA firms in the market expected to decrease slightly as RDR approaches
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- Figure 1: Number of directly authorised retail intermediary firms, by sector (primary category only) September 2008-September 2012
- Intermediaries dominate unit trust and OEIC sales
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- Figure 2: Estimated share of gross retail unit trust and OEIC sales, by distribution channel, 2012
- Market factors
- Regulatory changes – the RDR
- Consumer attitudes towards saving
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- Figure 3: Intended equity buying and selling indices, Q3/Q4 2002-Q3/Q4 2012
- Networks
- Companies, products and innovations
- Competitive context
- Technology innovations driving the market
- Top 100 IFA firms
- The IFA
- IFAs are seeing their clients holding their current position
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- Figure 4: Investment environment impact on client investment behaviour, August 2012
- Clients are looking to spread and reduce risk
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- Figure 5: Economic environment impact on client investment preferences, August 2012
- More than two thirds of IFAs set to focus on high value clients in 2013
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- Figure 6: Plans for impending business changes, August 2012
- Increase in restricted advice offerings expected post-RDR
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- Figure 7: Current and expected operating models post-RDR, August 2012
- IFAs have fears about the impact of the RDR
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- Figure 8: Perceived impact of market developments on own business over the next 12 months, August 2012
- What we think
Issues in the Market
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- How can technology help intermediaries improve their offering?
- How can IFAs add value for their customers?
- Is the IFA market set to focus on outsourcing?
- How can intermediaries continue to service low-value clients?
Trend Application
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- Positive changes will come from the RDR
- Knowing your customer offers the chance to deliver a personalised service
- Intermediaries must develop their online presence
Market Drivers
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- Key points
- Retail investment appetite encouraging…
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- Figure 9: Intended equity buying and selling indices, Q3/Q4 2002-Q3/Q4 2012
- … despite the stock market doing little to build consumer confidence
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- Figure 10: FTSE 100 and FTSE All-Share – daily index movements, January 2004-August 2012
- Base rate levels keep savings returns low
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- Figure 11: Average monthly changes in the Bank of England base rate, CPI and RPI-UK, 2004-12
- Decline in performance fee numbers
- IFA networks – all change?
- FSCS Levy and Money Advice Service fees upset intermediaries
- Outsourcing could be the answer to navigate regulatory changes
- Key regulatory developments
- Regulation – the RDR will change the advisory landscape
- A large number of IFAs have not joined a platform prior to RDR changes
- Restricted advice models set to increase in post-RDR world
- PRIPS
- MiFID proposals to improve the investing landscape
- Ban on platform rebates upheld
Competitor Channels
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- Key points
- A note on Product Sales Data
- High street lenders dominate investment product sales
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- Figure 12: Volume of regulated retail sales of investment products, year to March 2012
- Banks look to attract the IFA target market
- Platform market
- Size of the platform market
- Execution only stockbrokers are key competition for IFAs
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- Figure 13: Online trades as a percentage of execution-only trades, 2007-11
Who’s Innovating
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- Key points
- Technology innovations
- Guardian Wealth Management offers Skype advice
- Compare your adviser service launches
- Fund houses combine to develop D2C online proposition
- Aviva launches funds for infrastructure project investing
Market SWOT Analysis
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- Figure 14: SWOT analysis for the saving and investing intermediary market, 2012
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Adviser Share of the Investments Business
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- Key points
- Ownership of savings and investment products
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- Figure 15: Ownership of saving and investment products, May 2012
- Gross retail sales of unit trusts and OEICs set to decrease in 2012
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- Figure 16: Gross retail sales of unit trusts and OEICs, by distribution channel, 2008-12
- Fund platform distribution of retail unit trust and OEIC sales increases
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- Figure 17: Estimated share of gross retail unit trust and OEIC sales, by distribution channel, 2012
- IFAs dominate investment bond sales
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- Figure 18: New investment bond premiums, by sales channel, 2009-12
Adviser Market Size and Firm Rankings
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- Key points
- IFA marketplace changing
- Intermediary numbers will decrease further
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- Figure 19: Estimate of number of directly authorised retail intermediary firms, September 2010-September 2013
- Financial adviser numbers are holding up well
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- Figure 20: Estimate of number of directly authorised retail intermediary firms, by sector (primary category only), September 2008-September 2013
- Sesame remains largest IFA firm by turnover
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- Figure 21: Top 15 financial advisers in the UK, based on advisory turnover, 2011/12
Companies and Products
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- Brewin Dolphin
- Sesame Bankhall
- Openwork
- Hargreaves Lansdown
Advertising and Promotion
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- Key points
- Financial advice and intermediary-related adspend decreased in 2011-12
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- Figure 22: Advertising by financial intermediaries, by sub-sector, 2010-12
- Press and internet are the dominant intermediary-related advertising
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- Figure 23: Proportional distribution of intermediary-related and financial advice advertising, by media type, 2011/12
- A note on adspend
The IFA – Client Preferences and Behaviour
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- Key points
- About Mintel’s IFA research
- Clients are holding out until the storm passes
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- Figure 24: Investment environment impact on client investment behaviour, August 2012
- Client investment preferences are diversifying
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- Figure 25: Economic environment impact on client investment preferences, August 2012
The IFA – Impact of the RDR
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- Key points
- High-value clients set to become the focus of many IFAs
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- Figure 26: Plans for impending business changes, August 2012
- The shift online
- Increase in restricted advice expected post-RDR
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- Figure 27: Current and expected operating models post-RDR, August 2012
The IFA – Impact of Market Developments
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- Key points
- Nearly half of IFAs expect the RDR to negatively impact their business
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- Figure 28: Perceived impact of market developments on own business over the next 12 months, August 2012
- Majority of IFAs expect a negative impact from the RDR
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- Figure 29: Impact of the RDR on business over next 12 months, January 2009-August 2012
- Lack of investor confidence in the stock market is an IFA concern
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- Figure 30: Impact of consumer confidence in stockmarket-based investments over next 12 months, January 2009-August 2012
- Consumer confidence in the housing market troubling majority of IFAs
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- Figure 31: Impact of consumer confidence in the housing market over next 12 months, January 2009-August 2012
- Reputation of the financial services industry remains a concern
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- Figure 32: Impact of the overall reputation of the financial services industry amongst consumers over next 12 months, January 2009-August 2012
- Feelings of positivity around NEST are decreasing
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- Figure 33: Impact of the introduction of NEST over the next 12 months, January 2009-August 2012
- Figure 34: Impact of the introduction of auto enrolment over the next 12 months, August 2012
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