Table of Contents
Introduction
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- Market definitions
- Abbreviations
Executive Summary
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- The market
- Adviser population continues to contract
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- Figure 1: Number of directly authorised retail intermediary firms, by primary category sector, 2006-12
- Adviser share of individual pension business
- Adviser share of occupational pension business
- Adviser share of annuity and drawdown business
- Key factors
- Advisers facing increased regulatory pressure…
- … and increased capital requirements
- Demand drivers
- Companies, brands and innovation
- The largest intermediary firms
- IFA networks providing regulatory support
- The adviser
- Adviser confidence continues to ebb away
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- Figure 2: Confidence in own business prospects compared to six months ago, 2009-12
- Adviser concerns
- Business intentions
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- Figure 3: Business intentions over the next 12 months, November 2012
- Main challenges facing the pensions industry
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- Figure 4: Top five biggest challenges facing pension intermediaries, November 2012
- Expectations in relation to new pensions business
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- Figure 5: New pensions business expectations for the coming year, November 2012
- NEST impact on adviser charges
- What we think
Issues in the Market
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- How confident are pensions IFAs feeling about their business prospects?
- And how prepared are they for the post-RDR world?
- What impact will the reforms have on the advice market?
- And will it really improve consumer access to advice?
- And what impact will the auto-enrolment revolution have on the market?
Trend Application
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- Customised advice that is worth paying for
- Auto-enrolment provides the means to tackle the pensions gender gap
- 2015: Brand Intervention
Regulatory Context
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- Key points
- At last, the new RDR regime is here
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- Figure 6: Summary of key regulatory requirements for the retail intermediary market, pre- and post-RDR
- Some advisers left it until the last minute to make the necessary changes
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- Figure 7: Adviser preparation for the RDR, Q1 2011 and Q3 2012
- Will charging fees create an advice gap?
- More streamlined and simplified products and services will emerge to fill the gap
- Could new technology and workplace marketing bridge this gap?
- FSA to be replaced by two new regulatory bodies in 2013
Market Drivers
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- Key points
- Workplace pension auto-enrolment will massively boost pension participation
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- Figure 8: Ownership of private pension, by product type and gender, January 2012
- Who will the new reforms benefit?
- How will the reforms impact pension providers?
- But what of pension intermediaries?
- Implications for pensions decumulation
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- Figure 9: Share of external versus internal new pension annuity sales, 2002-11
- Other issues affecting the pensions industry
- Overview of macroeconomic factors influencing client behaviour and pension fund performance
Who’s Innovating?
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- Key points
- RDR transitional tools launched by the larger networks
- Recent developments in the platform space
- Other new launches
Market SWOT Analysis
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- Figure 10: Pensions advice market – summary of strengths, weaknesses, opportunities and threats, 2013
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Size of the Intermediary Market
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- Key points
- Contraction in the number of DA firms continues, albeit at a slower pace
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- Figure 11: Total number of directly authorised retail intermediary firms, 2006-12
- The financial advice sector remains the most resilient
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- Figure 12: Number of directly authorised retail intermediary firms, by sector (primary category only), 2006-12
- Number of finance ARs has also fallen over the past two years
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- Figure 13: Number of financial advice appointed representatives and directly authorised firms, by type, 2008-12
- Size of the overall retail investment adviser population
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- Figure 14: Size of retail investment adviser population, by adviser category, 2011-12
Adviser Share of Individual Pensions Business
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- Key points
- Prior to the RDR deadline, intermediaries fell into just two broad categories
- Intermediaries play a huge role in the sale of individual pension products
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- Figure 15: Proportional distribution of total new individual pension premiums, by sales channel, 2008-12
- Between 2009 and 2012, IFAs grew their market share
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- Figure 16: Total new individual pension business – regular premiums, by sales channel, 2008-12
- Figure 17: Total new individual pension business – single premiums, by sales channel, 2008-12
- Direct sales are very rare, apart from in the individual stakeholder market
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- Figure 18: Proportional distribution of new individual pension business by sales channel and product type, 2012
Adviser Share of Occupational Pensions Business
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- Key points
- Most occupational pension business is sold with advice
- IFAs retained their large share of the occupational pension sector in 2012
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- Figure 19: Proportional distribution of total new insurer-administered occupational pension premiums, by sales channel, 2008-12
- IFAs grew their share of regular-premium business, despite a fall in income
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- Figure 20: Total new insurer-administered occupational pension business – regular premiums, by sales channel, 2008-12
- Single-premium business boosted by direct sale of TIPs in 2012
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- Figure 21: Total insurer-administered occupational – single premiums, by sales channel, 2008-12
- Distribution mix varies according to product type
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- Figure 22: Proportional distribution of new insurer-administered occupational business by sales channel and product type, 2012
Adviser Share of Retirement Income Business
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- Key points
- Non-intermediated sales are fairly common in the annuity market…
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- Figure 23: New pension annuity premiums, by sales channel, 2008-12
- Figure 24: New pension annuity premiums, by sales channel, 2008-12
- … but are virtually non-existent in the drawdown market
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- Figure 25: New income drawdown premiums, by sales channel, 2008-12
- Figure 26: New income drawdown premiums, by sales channel, 2008-12
Adviser Firm Rankings
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- Key points
- A fragmented marketplace, which is undergoing continual consolidation
- Sesame Bankhall continues to lead the adviser market, based on turnover
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- Figure 27: Top 15 financial advisers in the UK, based on advisory turnover, 2011/12
Companies and Products
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- Sesame Bankhall
- 2012 ranking
- Company description
- Service offering
- Financial performance indicators
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- Figure 28: Key financial data for Sesame Bankhall Group Limited, 2010-11
- Recent activity
- Brewin Dolphin
- Ranking
- Company description
- Service offering
- Financial performance indicators
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- Figure 29: Key financial data for Brewin Dolphin Holdings, 2011-12
- Recent activity
- Openwork
- 2012 ranking
- Company description
- Service offering
- Financial performance indicators
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- Figure 30: Key financial data for Openwork Limited, 2010-11
- Recent activity
- Intrinsic
- 2012 ranking
- Company description
- Service offering
- Financial performance indicators
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- Figure 31: Key financial data for Intrinsic Financial Services Limited, 2010-11
- Recent activity
- Tenet
- 2012 ranking
- Company description
- Service offering
- Financial performance indicators
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- Figure 32: Key financial data for Tenet Group Limited, 2010-11
- Recent activity
- Positive Solutions
- 2012 ranking
- Company description
- Service offering
- Financial performance indicators
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- Figure 33: Key financial data for AEGON’s UK distribution business, 2010-11
- Recent activity
Advertising and Promotion
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- Key points
- There is limited adspend by companies offering pensions advice
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- Figure 34: Advertising expenditure relating to financial advice and intermediaries, by sub-category, 2010-12
- Metlife and Fidelity lead the way in advertising their retirement saving and income solutions to intermediaries
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- Figure 35: Top ten advertisers in the intermediary pensions and retirement income sub-categories, 2010-12
- Press advertising accounts for the majority of the expenditure
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- Figure 36: Proportional distribution of advertising expenditure on pensions and retirement income advice, by media type, 2010-12
IFA Business Confidence
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- Key points
- About Mintel’s IFA research
- One in four pensions IFAs are feeling less confident about their own business prospects than six months ago...
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- Figure 37: Confidence in own business prospects compared to six months ago, 2009-12
- … reflecting a gloomy economic outlook…
- … and an increasing regulatory burden
Impact of RDR and Other Market Factors
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- Key points
- Almost half of all pension IFAs expect the RDR to negatively affect their business over the coming year
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- Figure 38: Perceived impact of regulatory and other market developments on own business over the next 12 months, in order of positive influence, November 2012
- As the RDR reforms become a looming reality, many advisers are still pessimistic about its impact
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- Figure 39: Perceived impact of the RDR on own business over the next 12 months, 2009-12
- Auto-enrolment is increasingly being viewed as a positive development…
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- Figure 40: Perceived impact of auto-enrolment on own business over the next 12 months, 2009-12
- … but low-cost NEST poses a challenge
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- Figure 41: Perceived impact of NEST on own business over the next 12 months, 2009-12
- Still work to be done to improve the reputation of the financial services industry
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- Figure 42: Perceived impact of financial industry’s reputation on own business over the next 12 months, 2009-12
- Pension IFAs are feeling more positive about the investment climate
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- Figure 43: Perceived impact of consumer confidence in stock market-based investments on own business over the next 12 months, 2009-12
- Figure 44: Perceived impact of consumer confidence in the housing market on own business over the next 12 months, 2009-12
Business Intentions
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- Key points
- Securing recurring revenue streams remains a key area of focus
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- Figure 45: Business intentions over the next 12 months, 2009-12
Core Challenges Facing Pension IFAs
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- Key points
- Low retirement-saving priority by consumers is top challenge
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- Figure 46: Biggest challenges facing pension intermediaries, November 2012
Prospects for New Pensions Business
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- Key points
- Twice as many advisers expect to their pensions business to grow over the next year than decline
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- Figure 47: New pensions business expectations for the coming year, November 2012
- More than a quarter think that that NEST will lead to lower advice and product charges
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- Figure 48: Expectation of pension product/advice charges going forward, November 2012
Appendix – Adviser Share of Individual Pensions Business
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- Personal pensions
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- Figure 49: New personal pension business – regular premiums, by sales channel, 2008-12
- Figure 50: New personal pension business – single premiums, by sales channel, 2008-12
- Stakeholder pensions (individual)
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- Figure 51: New personal pension business – regular premiums, by sales channel, 2008-12
- Figure 52: New personal pension business – single premiums, by sales channel, 2008-12
- Stakeholder pensions (employer-sponsored)
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- Figure 53: New personal pension business – regular premiums, by sales channel, 2008-12
- Figure 54: New personal pension business – single premiums, by sales channel, 2008-12
- Insured SIPPs
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- Figure 55: New personal pension business – regular premiums, by sales channel, 2008-12
- Figure 56: New personal pension business – single premiums, by sales channel, 2008-12
- GPPs
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- Figure 57: New personal pension business – regular premiums, by sales channel, 2008-12
- Figure 58: New personal pension business – single premiums, by sales channel, 2008-12
Appendix – Adviser Share of Occupational Pensions Business
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- Defined-benefit occupational pensions
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- Figure 59: New DB occupational pension business – regular premiums, by sales channel, 2008-12
- Figure 60: New DB occupational pension business – single premiums, by sales channel, 2008-12
- Defined-contribution occupational pensions
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- Figure 61: New DC occupational pension business – regular premiums, by sales channel, 2008-12
- Figure 62: New DC occupational pension business – single premiums, by sales channel, 2008-12
- EPPs and SSASs
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- Figure 63: New EPP/SSAS business – regular premiums, by sales channel, 2008-12
- Figure 64: New EPP/SSAS business – single premiums, by sales channel, 2008-12
- Trustee investment plans
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- Figure 65: New TIPs business – single premiums, by sales channel, 2008-12
Appendix – Pension Product Definitions
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- Figure 66: Types of private pension provision, UK
- The decumulation or ‘at-retirement’ market
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- Figure 67: Overview of the annuity and retirement income market
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