Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

Affluent Investing and Banking - UK - November 2010

This report provides an overview of the key developments in the affluent banking and investing industry. In addition to quantifying the size of the target wealth market, the report highlights the key economic and regulatory issues impacting the wider wealth management industry. The market size sections provide a detailed account of industry growth in assets under management, revenue, and the number of portfolios. The final sections of the report feature the findings of Mintel’s exclusively commissioned consumer research on individuals which have £50,000 or more in investible assets.

  • According to Mintel 4.5 million people in the UK have investible assets worth between £50 and £250K. This indicates there is plenty of room for growth for premier divisions of high street banks and lower tier private banks.
  • Although in value terms, most money is managed on a discretionary basis (68%), clients are becoming increasingly confident about managing their own assets - close to three quarters of all wealth management portfolios are execution-only.
  • Affluent investing and banking firms are starting to apply a more sophisticated approach to servicing their client base. There is now more emphasis on qualitative factors (ie according to source of wealth, investment style, client lifecycle, etc) instead of just quantitative factors (ie affluent, HNW, UHNW, etc).
  • With more clients interested in investing in emerging markets, there is an opportunity for private banks and wealth mangers to take advantage of their global presence by organizing ‘emerging market investment tours’ for prospective western investors.
  • Although a more restrictive regulatory environment is reducing the roll of offshore investment products and services, changes in the tax regime are also creating more demand for specialist tax advice and asset allocation expertise.
  • With the tax burden on the wealthy having increased significantly, there is an opportunity for affluent banking and investment firms to develop specialist services that can assist affluent investors invest in tax-efficient alternatives such as jewellery and artwork.

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Issues in the Market

      • Key issues
        • Abbreviations
          • Key sources
          • Future Opportunities

            • Growing a Longer Tail
              • The Real Thing
              • Market in Brief

                • 5.9 million adults belong to the target wealth group
                  • Figure 1: Distribution of investible assets among the UK population, 2010
                • Overall wealth management industry revenue recovers in 2010
                  • Figure 2: Total wealth management industry revenue*, by firm type, 2005-10
                • Only small changes in source of revenue for some firm types
                  • Private bank fund withdrawal results in £6 billion net fund outflow
                    • Execution-only accounts behind growth in portfolio numbers
                      • Majority of client assets still in discretionary accounts
                        • Figure 3: Investment assets held by wealth managers, by mandate type, 2006-09
                      • Prospects for wealth creation more favourable abroad
                        • Financial crisis has made the wealth industry’s client base wiser
                          • Tax clampdown on wealthy is affecting business practices
                            • Market share
                              • Wealth industry adspend up 19% in 2010
                                • Key consumer research findings
                                  • Asset ownership
                                    • Use of professional advice
                                      • Attitudes towards banking and financial management
                                      • Internal Market Environment

                                        • Key points
                                          • Trend away from owning direct securities reversed in 2009
                                            • Figure 4: Asset types as a proportion of total investment assets for wealth managers, 2005-09
                                          • Slump in revenue return on managed assets for wealth managers
                                            • Figure 5: Revenue return* on discretionary and advisory assets for wealth managers (excluding execution-only stockbrokers), 2004-09
                                          • Financial crisis has altered client behaviour
                                            • In response the industry is changing the way it does business
                                              • Recent regulatory developments
                                                • Tax burden on high earners and wealthy increases significantly
                                                  • CGT raised to 28% for higher-rate taxpayers
                                                    • Limits on pension tax relief for high earners from April 2011…
                                                      • …will motivate them to seek more tax-efficient alternatives
                                                        • New government reviewing taxation of non-doms
                                                          • Offshore business impacted by regulatory clampdown
                                                          • Broader Market Environment

                                                            • Key points
                                                              • Tentative economic recovery
                                                                • Figure 6: Total GDP, at current prices, 2006-13
                                                              • More wealth migrates back into shares as markets recover…
                                                                • Figure 7: FTSE 100 and FTSE All Share – daily index movements, October 2004-October 2010
                                                              • …but crisis has created a more discerning client
                                                                • More geographical diversification expected
                                                                  • Figure 8: Market capitalisation of global stock exchanges*, by region, year to October, 2007-10
                                                                • Above-target inflation will increase demand for tax-efficient wrappers
                                                                  • Figure 9: Monthly changes in the rate of annual inflation* and Bank of England base rate – UK, October 2007-October 2010
                                                              • Strengths and Weaknesses

                                                                  • Figure 10: Affluent investment and banking – SWOT analysis, 2010
                                                              • The Size of the Target Wealth Market

                                                                • Key points
                                                                  • 3.6 million adults report owning investible assets worth £100K or more
                                                                    • Figure 11: Distribution of investible assets among the UK population, 2010
                                                                • Market Size and Forecast

                                                                  • Key points
                                                                    • Recovery in overall wealth management industry revenue in 2010
                                                                      • Figure 12: Total wealth management industry revenue*, by firm type, 2005-10
                                                                    • Subtle changes in revenue streams among firm types
                                                                      • Figure 13: Proportion of revenue, by firm type and stream, 2008 and 2009
                                                                    • Value of investment assets rises for all wealth manager firm types
                                                                      • Figure 14: Value of investment assets, by firm type, 2006-09
                                                                    • £6 billion net outflow of new funds in 2009
                                                                      • Figure 15: Wealth manager investment asset growth and net new business, 2006-09
                                                                    • Growth in portfolio numbers driven by execution-only accounts
                                                                      • Figure 16: Number of portfolios, by firm type, 2004-09
                                                                    • Market forecast
                                                                        • Figure 17: Forecast of wealth management industry revenue*, by firm type, 2006-15
                                                                      • Fan chart
                                                                        • Figure 18: Wealth management industry revenue* forecast confidence range, 2005-15
                                                                    • Market Segmentation

                                                                      • Key points
                                                                        • Private bank portfolio numbers continue to decline
                                                                          • Figure 19: Number of nominee* portfolios, by firm type and size, 2009
                                                                        • Average wealth manager portfolio rebounds to £265K in 2010
                                                                          • Figure 20: Number of nominee* portfolios and total value of assets, by size of portfolio for wealth managers, 2009
                                                                        • Majority of client funds still in taxed accounts
                                                                          • Figure 21: Asset ownership for wealth managers as a proportion of total investment assets for 2009
                                                                      • Market Share

                                                                        • Key points
                                                                          • Bank of America number one in global assets under management
                                                                            • Figure 22: Top ten largest global wealth managers, by assets under management, 2010
                                                                          • Barclays Wealth and Coutts & Co control a fifth of the UK market
                                                                            • Figure 23: 25 largest wealth managers, by assets under management – UK, December 2009
                                                                        • Companies and Products

                                                                          • Major players
                                                                            • Barclays Wealth
                                                                              • Coutts & Co.
                                                                                • JPMorgan Private Bank
                                                                                  • HSBC Private Bank
                                                                                    • UBS Wealth management
                                                                                      • Lloyds TSB Private Banking
                                                                                      • Brand Communication and Promotion

                                                                                        • Key points
                                                                                          • Asset management and private banking adspend up 19% in 2010
                                                                                            • Figure 24: Total advertising expenditure on asset management and private banking and other related products and services, 2008-10
                                                                                          • Bank of Scotland and NatWest account for over half of all adspend
                                                                                            • Figure 25: Advertising expenditure on asset management and private banking – top 20 advertisers, 2009 and 2010
                                                                                          • Press accounts for three fifths of adspend in 2010
                                                                                            • Figure 26: Proportional distribution of adspend on private banking and asset management, by main media type, 2010*
                                                                                          • Sponsorships commonly used to promote wealth management
                                                                                          • Channels to Market

                                                                                            • Key points
                                                                                              • Majority of wealth management client assets in discretionary accounts
                                                                                                • Figure 27: Investment assets held by wealth managers, by mandate type, 2006-09
                                                                                              • Technology has improved asset management capabilities
                                                                                              • The Consumer – Profile of the Target Wealth Market

                                                                                                • Key points
                                                                                                  • In 2010 13% of population say they are in the target wealth market
                                                                                                    • A cautionary note
                                                                                                      • Figure 28: Size and segmentation of the target wealth market based on investible assets*, September 2010
                                                                                                    • Target wealth market skewed towards the over-55s
                                                                                                      • Figure 29: Target wealth groups, by gender, age, socio-economic group, detailed lifestage, lifestage and marital status, September 2010
                                                                                                    • As expected wealth is highly concentrated in the South of the country
                                                                                                      • Figure 30: Target wealth groups, by working status, household income and region, September 2010
                                                                                                    • Level of Investible assets considered ahead of income
                                                                                                      • Above-average levels of tech-savvy among wealthy
                                                                                                        • Figure 31: Target wealth groups, by media usage, September 2010
                                                                                                    • The Consumer – Asset Ownership

                                                                                                      • Key points
                                                                                                        • Investment in shares and property highest among Ultra Affluent or HNW
                                                                                                          • Figure 32: Asset ownership, by total value of investible assets, September 2010
                                                                                                        • More investment options open up as one moves up wealth scale
                                                                                                          • Some variation in ownership according to gender and age
                                                                                                            • Figure 33: Asset ownership, by gender and age, September 2010
                                                                                                          • Socio-economic background and income levels and asset ownership
                                                                                                            • Figure 34: Asset ownership, by socio-economic group and gross annual household income, September 2010
                                                                                                        • The Consumer – Use of Professional Advice

                                                                                                          • Key points
                                                                                                            • Professional advisory services in demand at upper end of wealth scale
                                                                                                              • Figure 35: Sources used for financial or investment advice, by total value of investible assets, September 2010
                                                                                                            • High street banks remain relevant no matter what age
                                                                                                              • Figure 36: Sources used for financial or investment advice, by gender and age, September 2010
                                                                                                            • Use of the internet significantly higher among younger adults
                                                                                                              • Level of affluence and income impact types of sources used
                                                                                                                • Figure 37: Sources used for financial or investment advice, by socio-economic group and gross annual household income, September 2010
                                                                                                            • The Consumer – Attitudes towards Banking and Financial Management

                                                                                                              • Key points
                                                                                                                • The higher amount of investible assets, the higher the expectations
                                                                                                                  • Figure 38: Most important attributes in choosing a company to deal with, by total value of investible assets, September 2010
                                                                                                                • Key attitudinal target groups
                                                                                                                  • Figure 39: Size and segmentation of the target wealth market based on investible assets, by target groups, September 2010
                                                                                                                  • Figure 40: Size and segmentation of the target wealth market based on investible assets, by target groups, September 2010
                                                                                                                • Variations in asset ownership levels between groups
                                                                                                                  • Figure 41: Asset ownership, by total value of investible assets, by target groups, September 2010
                                                                                                                • Attitudinal groups and sources of advice
                                                                                                                  • Figure 42: Sources used for financial or investment advice, by total value of investible assets, by target groups, September 2010
                                                                                                              • Appendix – Market Size and Forecast

                                                                                                                  • Figure 43: Forecast of wealth management industry revenue*, best and worst case data, 2005-15
                                                                                                              • Appendix – The Consumer: Attitudes towards Banking and Financial Management

                                                                                                                  • Figure 44: Most important attributes in choosing a company to deal with, by total value of investible assets, by target groups, September 2010
                                                                                                                  • Figure 45: Target groups, by demographics, September 2010

                                                                                                              Companies Covered

                                                                                                              • Alzheimer's Society
                                                                                                              • Asda Group Ltd
                                                                                                              • Bank of America Corporation
                                                                                                              • Bank of England
                                                                                                              • Brewin Dolphin Holdings PLC
                                                                                                              • Clariden Leu Private Bank
                                                                                                              • Clydesdale Bank
                                                                                                              • Co-operative Group
                                                                                                              • Coutts & Co
                                                                                                              • Deutsche Bank AG
                                                                                                              • Fidelity Investment Services Limited
                                                                                                              • Financial Services Authority (The)
                                                                                                              • Fundsdirect
                                                                                                              • Government Actuary's Department (GAD)
                                                                                                              • Hargreaves Lansdown Plc
                                                                                                              • HBOS plc (Halifax Bank of Scotland)
                                                                                                              • HSBC Private Bank (UK) Limited
                                                                                                              • Jupiter Unit Trust Managers Ltd
                                                                                                              • Morgan Stanley & Co International Ltd
                                                                                                              • NatWest
                                                                                                              • Royal Bank of Scotland Group plc
                                                                                                              • Société Générale Group

                                                                                                              Affluent Investing and Banking - UK - November 2010

                                                                                                              £1,995.00 (Excl.Tax)