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

Consumers and Direct Platforms - UK - August 2013

“Direct DIY platforms are popular amongst consumers who have an interest in finance and confidence in making financial decisions. For less confident consumers direct discretionary platforms could solve their investment needs.”

– Alex Hiscox, Senior Analyst – Financial Services

Some questions answered in this report include:

  • Can direct DIY platforms help less affluent consumers to invest their money?
  • Can the RDR gap be filled by direct discretionary platforms?
  • How important is brand in choosing an investment provider?
  • Will large financial institutions want to join the direct platform market?

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. Introduction

      • Abbreviations
      • Executive Summary

          • Consumers and the appetite for direct platforms
            • Figure 1: Attitudes towards financial advice, June 2013
          • Market factors
            • Consumers still feeling the effects of the financial crisis
              • Strong performance of financial markets has made equities attractive to consumers
                • The internet is driving direct platforms into the mainstream
                  • Companies, brands and innovation
                    • Adspend lower in 2012/13 as the industry waited for the RDR
                      • Figure 2: Advertising expenditure by selected platform providers, 2008/09 – 2012/13
                    • The consumer
                      • Some 65% of consumers have savings and investments under £30,000
                        • Figure 3: Value of savings and investments, June 2013
                      • Preferred approach to investment decisions
                        • Figure 4: Attitudes towards financial advice, June 2013
                      • Attitudes towards the concept of discretionary fund management
                        • Figure 5: Attitudes towards the concept of discretionary fund management, June 2013
                      • Amount that consumers expect to pay in charges when investing
                        • Figure 6: Amount that consumers expect to pay in charges, June 2013
                      • Considerations when choosing a company to invest with
                        • Figure 7: Considerations when choosing a company to invest with, June 2013
                      • How much choice consumers want in picking their investments
                        • Figure 8: Appeal of selected online investment options, June 2013
                      • What we think
                      • Issues in the Market

                          • Can direct DIY platforms help less affluent consumers to invest their money?
                            • Can the RDR gap be filled by direct discretionary platforms?
                              • How important is brand in choosing an investment provider?
                                • Will large financial institutions want to join the direct platform market?
                                • Trend Application

                                  • Simplifying choice
                                    • Take control of your finances
                                      • Mintel’s Futures: Generation Next
                                      • Market Drivers

                                        • Key points
                                          • Household incomes remain under pressure
                                            • Figure 9: Trends in average earnings (excluding bonuses) versus retail price inflation, 2007-13
                                          • Global markets have performed well over the past year
                                            • Figure 10: Nikkei 225, FTSE 100, S&P 100, Eurofirst 300 – adjusted closing values index, January 2003-June 2013
                                          • Consumers have little interest in the performance of the stock market
                                            • Figure 11: Consumer engagement in saving and investing, November 2012
                                          • Savings accounts are underperforming
                                            • Figure 12: Average annual changes in the Bank of England base rate, CPI and RPI – UK, January 2010 – April 2013
                                          • Consumers are becoming dependent on online sources of information
                                            • Figure 13: Main sources of information about financial products, June 2013
                                          • Online is the most popular channel to buy and sell shares
                                            • Figure 14: Ways in which consumers most like to buy or sell shares, June 2013
                                        • Regulation and Legislation

                                          • Key points
                                            • The RDR has changed the way advisers and providers charge clients
                                              • Summary of the RDRs changes
                                                • Figure 15: Summary of the key requirements for the retail investment market, pre- and post- RDR, 2013
                                              • RDR’s effect on the direct platform market
                                                • The growth of white labelling
                                                  • FCA policy paper adds clarity for the direct platform market
                                                    • Banks withdrawing from the advice space, leaving an opportunity for direct platforms
                                                      • Figure 16: Overview of selected retail banking providers investment advice services post-RDR, February 2013
                                                    • Auto-enrolment will encourage mass market consumers to own investments
                                                    • SWOT Analysis

                                                        • Figure 17: Direct Platforms Market – SWOT Analysis, 2013
                                                    • Who’s Innovating?

                                                      • Key points
                                                        • Nutmeg brings discretionary asset management to the mass market
                                                          • rplan focuses on usability and transparency to win over consumers
                                                            • Compare fund platforms
                                                              • Money on toast - the online financial adviser
                                                              • Consumers and the Appetite for Direct Platforms

                                                                • Consumers want to do things for themselves, but also have guidance
                                                                  • Figure 18: Attitudes towards financial advice, June 2013
                                                              • Companies and Products

                                                                • Barclays Stockbrokers
                                                                    • Figure 19: Key financial data for Barclays Stockbrokers, 2011-12
                                                                  • Fidelity
                                                                      • Figure 20: Key financial data for Fidelity Investment Services (UK), 2011-12
                                                                    • Hargreaves Lansdown
                                                                        • Figure 21: Key financial data for Hargreaves Lansdown, 2011-12
                                                                      • Selftrade
                                                                          • Figure 22: Key financial data for Talos Securities (Self Trade), 2010-11
                                                                        • TD Direct Investing
                                                                            • Figure 23: Key financial data for TD Direct Investing (Europe) Ltd, 2010-11
                                                                        • Brand Communication and Promotion

                                                                          • Key points
                                                                            • Adspend decreased in 2012/13 as the industry waited for RDR
                                                                              • Figure 24: Advertising expenditure by selected platform providers, 2008/09-2012/13
                                                                            • Top five players account for over 90% of adspend
                                                                              • Figure 25: Advertising expenditure by selected platform providers, by advertiser, 2009/10-2012/13
                                                                            • Providers cut back on internet spending
                                                                              • Figure 26: Advertising expenditure by selected platform providers, by media type, 2009/10-2012/13
                                                                          • Value of Savings and Investments and Product Ownership

                                                                            • Key points
                                                                              • Consumers have low levels of savings and investments
                                                                                • Figure 27: Value of savings and investments, June 2013
                                                                              • Appealing to younger consumers will help to develop future loyal customers
                                                                                • Figure 28: Amount of savings and investments, by age, June 2013
                                                                              • Most consumers struggle to save
                                                                                • Low-risk cash-based products remain popular despite losing value in real terms
                                                                                  • Figure 29: Ownership of financial products, June 2013
                                                                                • Consumers are risk-averse
                                                                                • Preferred Approach to Investment Decisions

                                                                                  • Key points
                                                                                    • Consumers want to have input in choosing their investments
                                                                                      • Figure 30: Attitudes towards financial advice, June 2013
                                                                                    • DIY investing is gaining popularity
                                                                                      • Wealthier consumers are more self-sufficient in choosing investments
                                                                                        • Figure 31: Attitudes towards financial advice, by amount of savings and investments, June 2013
                                                                                      • Consumers with low levels of savings and investments are in an advice gap
                                                                                      • Attitudes Towards Discretionary Fund Management

                                                                                        • Key points
                                                                                          • How Mintel have defined discretionary fund management in this report
                                                                                            • The evolution of discretionary fund manangement
                                                                                              • Appetite for discretionary fund managers is divided
                                                                                                • Figure 32: Attitudes towards the concept of discretionary fund management, June 2013
                                                                                              • Discretionary fund management is dominated by a few wealthy investors
                                                                                                • Younger consumers are more open to the concept of using a DFM
                                                                                                  • Figure 33: Attitudes towards the concept of discretionary fund management, by demographics, June 2013
                                                                                                • DIY investing is incompatible with the discretionary model
                                                                                                  • Figure 34: Attitudes towards the concept of discretionary fund management, by attitudes towards financial advice, June 2013
                                                                                                • DFMs could gain from marketing to consumers with lower levels of savings
                                                                                                  • Figure 35: Attitudes towards the concept of discretionary fund management, by amount of savings and investments, June 2013
                                                                                              • Consumer Expectations of Investment Charges

                                                                                                • Key points
                                                                                                  • Almost half of respondents expect to pay between 1%-2.9% charges
                                                                                                    • Figure 36: Amount consumers expect to pay in charges, June 2013
                                                                                                  • Consumers expect to pay less in charges as they get older
                                                                                                    • Figure 37: Amount consumers expect to pay in charges, June 2013
                                                                                                  • Consumers who want expert advice expect to pay more for the privilege
                                                                                                    • Figure 38: Amount consumers expect to pay in charges, by Attitudes towards financial advice, June 2013
                                                                                                • Considerations When Choosing an Investment Provider

                                                                                                  • Key points
                                                                                                    • Six out of ten look for low fees when choosing an investment company
                                                                                                      • Figure 39: Considerations when choosing a company to invest with, June 2013
                                                                                                    • Four out of ten consumers want a clear charging structure
                                                                                                      • Younger consumers are less brand focused than over-55s
                                                                                                        • Figure 40: Considerations when choosing a company to invest with, by Age, June 2013
                                                                                                      • Recommendations are more important for young consumers than over 55s
                                                                                                        • Clear charging structures are the main consideration for over-55s
                                                                                                        • Preferred Level of Online Investment Choice

                                                                                                          • Key points
                                                                                                            • Investors show a preference for more limited investment options
                                                                                                              • Figure 41: Appeal of online investment options, June 2013
                                                                                                            • DIY investors want the lowest possible costs
                                                                                                              • Figure 42: Considerations when choosing a company to invest with, by appeal of investment options, June 2013
                                                                                                            • Consumers who want a small handful of investment options want companies to use clear language
                                                                                                              • DIY consumers expect to pay lower charges
                                                                                                                • Figure 43: Amount consumers expect to pay in charges, by Appeal of investment options, June 2013
                                                                                                              • Consumers that want simple choices are more open to the idea of DFM
                                                                                                                • Figure 44: Attitudes towards the concept of discretionary fund management, by appeal of investment options, June 2013
                                                                                                              • Consumers with lower levels of savings prefer fewer investment options
                                                                                                                • Figure 45: Appeal of investment options, by amount of savings and investments, June 2013
                                                                                                            • Appetite for Features Offered by Online Investment Providers

                                                                                                              • Key points
                                                                                                                • Time poor consumers are unlikely to be interested in financial tutorials
                                                                                                                  • Figure 46: Appetite for features offered by online investment providers, June 2013
                                                                                                                • Investment researchers are more likely to want the largest choice of investments
                                                                                                                  • Figure 47: Cross analysis of appeal of different investment options, June 2013
                                                                                                                • Consumers that want to research the market are likely to want low fees
                                                                                                                  • Figure 48: Considerations when choosing a company to invest with, by Appeal of investment options, June 2013
                                                                                                                • Consumers with an interest in learning want to find out more about DFM
                                                                                                                  • Figure 49: Attitudes towards discretionary fund managers, by Appeal of investment options, June 2013
                                                                                                              • Appendix – Platform Overview

                                                                                                                  • Figure 50: Platform overview
                                                                                                              • Appendix – Types of Discretionary Fund Manager

                                                                                                                  • Figure 51: Types of DFM, 2013
                                                                                                              • Appendix – Value of Savings and Investments and Product Ownership

                                                                                                                  • Figure 52: Level of savings and investments, by demographics, June 2013
                                                                                                                  • Figure 53: Level of savings and investments, by demographics, June 2013 (continued)
                                                                                                                  • Figure 54: Financial products consumers own or plan on owning – Savings account/Cash ISA, by demographics, June 2013
                                                                                                                  • Figure 55: Financial products consumers own or plan on owning – Company pension, by demographics, June 2013
                                                                                                                  • Figure 56: Financial products consumers own or plan on owning – NS&I product, by demographics, June 2013
                                                                                                                  • Figure 57: Financial products consumers own or plan on owning – Personal pension, by demographics, June 2013
                                                                                                                  • Figure 58: Financial products consumers own or plan on owning – Individual company shares, by demographics, June 2013
                                                                                                                  • Figure 59: Financial products consumers own or plan on owning – With-profits, unit-linked, money market, distribution or guaranteed investment bond, by demographics, June 2013
                                                                                                                  • Figure 60: Financial products consumers own or plan on owning – Investment property, by demographics, June 2013
                                                                                                                  • Figure 61: Financial products consumers own or plan on owning – Unit trust/OEIC, by demographics, June 2013
                                                                                                                  • Figure 62: Financial products consumers own or plan on owning – Investment trust, by demographics, June 2013
                                                                                                                  • Figure 63: Financial products consumers own or plan on owning – SIPP, by demographics, June 2013
                                                                                                                  • Figure 64: Financial products consumers own or plan on owning – Financial spread-betting account, by demographics, June 2013
                                                                                                                  • Figure 65: Financial products consumers own or plan on owning – ETF, by demographics, June 2013
                                                                                                                  • Figure 66: Financial products consumers own or plan on owning – Other savings or investments, by demographics, June 2013
                                                                                                              • Appendix – Preferred Approach to Investment Decisions

                                                                                                                  • Figure 67: Attitudes towards financial advice, by demographics, June 2013
                                                                                                              • Appendix – Attitudes Towards Discretionary Fund Management

                                                                                                                  • Figure 68: Attitudes towards discretionary fund managers, by demographics, June 2013
                                                                                                              • Appendix – Consumer Expectations of Investment Charges

                                                                                                                  • Figure 69: Amount consumers expect to pay in charges, by demographics, June 2013
                                                                                                                  • Figure 70: Amount consumers expect to pay in charges, by demographics, June 2013 (continued)
                                                                                                              • Appendix – Considerations When Choosing an Investment Provider

                                                                                                                  • Figure 71: Most popular considerations when choosing a company to invest with, by demographics, June 2013
                                                                                                                  • Figure 72: Next most popular considerations when choosing a company to invest with, by demographics, June 2013
                                                                                                              • Appendix – Preferred Level of Online Investment Choice

                                                                                                                  • Figure 73: Appeal of various online investment options, June 2013
                                                                                                              • Appendix – Appetite for Features Offered by Online Investment Providers

                                                                                                                  • Figure 74: Appetite for features offered by online investment providers, June 2013

                                                                                                              Companies Covered

                                                                                                              • Barclays Bank plc
                                                                                                              • Capital Spreads
                                                                                                              • Charles Stanley Group plc
                                                                                                              • Fidelity Investment Services Limited
                                                                                                              • Hargreaves Lansdown Plc
                                                                                                              • London Capital Group
                                                                                                              • Société Générale Group
                                                                                                              • Talos Securities Ltd
                                                                                                              • TD Direct Investing
                                                                                                              • Toronto-Dominion Bank

                                                                                                              Consumers and Direct Platforms - UK - August 2013

                                                                                                              US $2,478.79 (Excl.Tax)