Table of Contents
Executive Summary
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- The market
- Drop in sales amid uncertainty
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- Figure 1: Value of gross and net retail sales, 2014-19
- Stocks and shares ISAs grow in volume and value
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- Figure 2: Average subscription per ISA, by component, 2013/14-2017/18
- Interest rates and savings ratios remain at historic lows
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- Figure 3: Household savings ratio, 2009-19 H1
- FCA looks to improve competition on investment platforms
- Companies and brands
- Technology and innovation are seen as priorities but also as risks
- High street banks continue to explore robo-advice
- Investment services in the FCA’s regulatory sandbox
- The consumer
- Stocks and shares ISAs are the most common investment products
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- Figure 4: Investment product ownership, July 2019
- Saving for the long term is the most common goal
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- Figure 5: Reasons for investing, July 2019
- Perceptions are markedly different depending on provider type
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- Figure 6: Perceptions of selected types of investment providers, July 2019
- Human advisers are generally perceived to be superior to robo-advisers
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- Figure 7: Robo-advisers vs human advisers, July 2019
- Fees and pricing are the main differentiator when choosing a provider
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- Figure 8: Reasons for choosing one investment service over another, July 2019
- Majority of investors/potential investors interested in thematic investing
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- Figure 9: Interest in investment themes, July 2019
- What we think
Issues and Insights
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- The potential of thematic investing
- The facts
- The implications
- Robo-advisers need to reinforce the message of affordability and accessibility
- The facts
- The implications
The Market – What You Need to Know
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- Drop in sales amid uncertainty
- Stocks and shares ISAs grow in volume and value
- Interest rates and savings ratios remain at historic lows
- FCA looks to improve competition on investment platforms
Market Environment
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- Drop in sales amid uncertainty
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- Figure 10: Value of gross and net retail sales, 2014-19
- … but stocks and shares ISAs grow in volume and value
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- Figure 11: Average subscription per ISA, by component, 2013/14-2017/18
Market Drivers
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- Interest rates remain at historic lows …
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- Figure 12: Effective interest rates on household deposit balances and official base rate, January 2010-July 2019
- … as is the case with savings ratios
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- Figure 13: Household savings ratio, 2009-19 H1
- FCA to improve competition on investment platforms
- Industry examples: the STAR initiative
- New rules announced for the P2P sector
- FCA to focus on outcome indicators
Companies and Brands – What You Need to Know
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- Technology and innovation are seen as priorities but also as risks
- High street banks continue to explore robo-advice
- Investment services in the FCA’s regulatory sandbox
Competitive Strategies
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- Technology and innovation are high on established brands’ priorities …
- … but are also seen as risks
- Some brands are more specific
- Investments and Open Banking: platforms, partnerships and personalisation
Launch Activity and Innovation
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- Santander and HSBC launch online services …
- … with more expected to follow suit …
- … but others are moving away from robo-advice
- Investment services in the FCA’s regulatory sandbox
- Distributed Ledger Technology
- Platforms
- Other propositions
The Consumer – What You Need to Know
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- Stocks and shares ISAs are the most common investment products
- Saving for the long term is the most common goal
- Perceptions are markedly different depending on provider type
- Human advisers are generally perceived to be superior to robo-advisers
- Fees and pricing are the main differentiator when choosing a provider
- Majority of investors/potential investors interested in thematic investing
Investor Profile
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- Stocks and shares ISAs are the most widely held investment product
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- Figure 14: Investment product ownership, July 2019
- Investors more likely to have substantial investable assets
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- Figure 15: Level of investable assets, July 2019
- Investors are less risk-averse
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- Figure 16: Level of comfort taking risks with savings, July 2019
Reasons for Investing
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- Saving for the long term is the most common goal
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- Figure 17: Reasons for investing, July 2019
- Investing vs saving
- Investing: beyond saving
- Majority of investors have more than one reason
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- Figure 18: Repertoire of reasons for investing, July 2019
Perceptions of Types of Investment Providers
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- Traditional investment providers are seen as experts
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- Figure 19: Perceptions of selected types of investment providers, July 2019
- Banks are associated with accessibility, convenience and security
- Online-only platforms and robo-advisers associated with innovation
Robo-advisers vs Human Advisers
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- Human advisers generally perceived to be superior to robo-advisers …
- … except at being unbiased
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- Figure 20: Robo-advisers vs human advisers, July 2019
- Mixed results across the generations
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- Figure 21: Share of investors/potential investors who say robo-advisers are better than human advisers, by age, July 2019
- Parents need convincing of affordability of robo-advisers
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- Figure 22: Robo-advisers vs human advisers: making investing more affordable – CHAID tree output, July 2019
Reasons for Choosing an Investment Service
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- Fees and pricing are the main differentiator
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- Figure 23: Reasons for choosing one investment service over another, July 2019
- Accessibility is important to consumers …
- … and so is the option of micro-investing
- Reasons for choosing an investment service: TURF analysis
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- Figure 24: Reasons for choosing one investment service over another – TURF Analysis, July 2019
Interest in Investment Themes
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- Investors most interested in tech, type of company and industry
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- Figure 25: Interest in investment themes, July 2019
- Environmental and ethical credentials are appealing
- Half of over-65s not likely to be interested in theme investing
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- Figure 26: Disinterest in investment themes, by age, July 2019
- Younger investors more passionate about a single subject
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- Figure 27: Repertoire of interest in investment themes, by age, July 2019
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- CHAID analysis methodology
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- Figure 28: Robo-advisers vs human advisers – CHAID Table output, July 2019
- TURF analysis methodology
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- Figure 29: Reasons for choosing one investment service over another – TURF Analysis table output, July 2019
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