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Description

Description

“Investment intermediaries are operating in a tough environment, with an increased regulatory burden. However, firms that are adequately capitalised and resourced can take advantage of a number of new opportunities in order to boost their revenue streams.”

Sarah Hitchcock, Senior Analyst – Financial Services

This report covers the following issues:

  • More advisers switching to a restricted model, due to compliance concerns and changes within the network sector
  • What’s in a name?
  • Evidence points to a significant consumer advice gap
  • Advisers must continually adapt to face the many challenges ahead

 

What's included

What's included

Table of contents

Table of contents

  1. Introduction

      • Market definitions
        • Abbreviations
        • Executive Summary

            • The market
              • Size of the adviser population
                • Figure 1: Size of retail investment adviser population, by adviser category, 2012-14
              • Revenue split
                • Number of firms by legal status
                  • Market factors
                    • Declining investment product sales…
                      • …partly driven by reduced demand for insurance investment bonds
                        • Key regulatory and policy developments
                          • More change on the horizon
                            • Company, brands and innovation
                              • Leading investment advisers
                                • Recent innovation
                                  • The adviser
                                    • Business model
                                      • Figure 2: Current business model, Q3 2013-Q3 2014
                                    • Pre- versus post-RDR revenue streams
                                      • Figure 3: Proportion of adviser/firm income generated by pre- and post-RDR business, Q3 2013-Q3 2014
                                    • Fee income generated by platforms versus product sales
                                      • Figure 4: Proportion of adviser/firm income generated by fund platforms, product sales, direct client payments and commission, Q3 2013-Q3 2014
                                    • Performance over the past year
                                      • Figure 5: Change in annual income over the past year, Q3 2013-Q3 2014
                                    • Client movements over the past year
                                      • Figure 6: Client acquisition and loss over the past 12 months, August- October 2014
                                    • Main challenges expected over the coming months
                                      • Figure 7: Top six challenges advisers expect to face over next 18 months, August- October 2014
                                    • What we think
                                    • Issues in the Market

                                        • More advisers switching to a restricted model, due to compliance concerns and changes within the network sector
                                          • The facts
                                            • The implications
                                              • What’s in a name?
                                                • The facts
                                                  • The implications
                                                    • Evidence points to a significant consumer advice gap
                                                      • The facts
                                                        • The implications
                                                          • Advisers must continually adapt to face the many challenges ahead
                                                            • The facts
                                                              • The implications
                                                              • Trend Application

                                                                  • Futures: Old Gold
                                                                    • Trend: Guiding Choice
                                                                      • Futures: Human
                                                                      • Market Drivers

                                                                        • Key points
                                                                          • Nearly half of all adult internet users have savings worth over £5,000
                                                                            • Figure 8: Level of personal savings, October 2014
                                                                          • Cash products are the most prevalent
                                                                            • Figure 9: Ownership of common savings and investment products, October 2014
                                                                          • Stockmarket hits renewed turbulence
                                                                            • Figure 10: FTSE 100 and FTSE All-Share – daily index movements, January 2004-October 2014
                                                                          • Inflation falls, as do prospects for an interest rate rise
                                                                            • Financial advisers are responsible for around half of all regulated investment and pension sales
                                                                              • Figure 11: Volume of regulated retail investment sales, 2010-14
                                                                            • Sharp decline in investment product sales through the retail banking channel
                                                                              • Figure 12: Volume of regulated retail investment product sales (excluding pensions and decumulation products), year to March 2014
                                                                            • Strong rise in non-advised sales
                                                                              • Recent legislative and regulatory developments
                                                                                • Restrictions on the retail distribution of UCIS and close substitutes
                                                                                  • Ban on new referral payments to discretionary fund managers
                                                                                    • Ban on platform cash rebates
                                                                                      • Review of RDR implementation
                                                                                        • FCA unveils new disclosure ‘assessment’ tool
                                                                                          • Increased pension flexibility
                                                                                            • MiFID II aims to close ‘gaps’ in existing regulation and bolster investor confidence
                                                                                            • Market SWOT Analysis

                                                                                                • Figure 13: Financial advice market – summary of strengths, weaknesses, opportunities and threats, 2014
                                                                                            • Who’s Innovating?

                                                                                              • Key points
                                                                                                • Investment platform plans to launch a D2C discretionary service to help fill the advice gap
                                                                                                  • Advisers are drawing on new technology to offer lower-cost simplified or self-service options
                                                                                                    • New investment app for the clients of financial advisers
                                                                                                    • Market Size

                                                                                                      • Key points
                                                                                                        • Size of the overall retail investment adviser population
                                                                                                          • Figure 14: Size of retail investment adviser population, by adviser category, 2012-14
                                                                                                        • Banks are continuing to cut back on adviser numbers
                                                                                                          • Financial advisers come in a number of guises
                                                                                                            • The recent contraction in directly authorised firms is being offset by a rise in the number of appointed representatives
                                                                                                              • Figure 15: Total number of registered financial advice firms, 2008-13
                                                                                                            • …but are we starting to see signs of a reverse trend?
                                                                                                              • Investment income grew 7% in 2013
                                                                                                                • Figure 16: Total revenues generated by registered financial advice firms, 2009-13
                                                                                                            • Adviser Share of Investment Business

                                                                                                              • Key points
                                                                                                                • Intermediaries increase their share of the retail investment fund market…
                                                                                                                  • Figure 17: Gross retail sales of unit trusts and OEICs, by distribution channel, 2010-14
                                                                                                                • …with a growing proportion of sales being made via platforms
                                                                                                                  • Figure 18: Gross retail unit trust and OEIC sales generated by intermediaries via platforms and other sales, 2011-14
                                                                                                                • Advisers are also responsible for generating the majority of investment bond sales
                                                                                                                  • Figure 19: New onshore insurance-administered investment and saving premiums, by sales channel, 2013-14
                                                                                                              • Adviser Firm Rankings

                                                                                                                • Key points
                                                                                                                  • St James’s Place jumps into the lead
                                                                                                                    • Figure 20: Top 15 financial advisers in the UK, based on gross pension and investment sales, 2012/13-2013/14
                                                                                                                  • Consolidation continues to reshape the intermediary landscape
                                                                                                                  • Companies and Products

                                                                                                                      • St James’s Place Wealth Management
                                                                                                                        • Description
                                                                                                                          • Position in the market
                                                                                                                            • Client proposition
                                                                                                                              • Key financial data
                                                                                                                                • Figure 21: St James’s Place Wealth Management – key annual data, 2012-13
                                                                                                                              • Recent activity
                                                                                                                                • Hargreaves Lansdown
                                                                                                                                  • Description
                                                                                                                                    • Position in the market
                                                                                                                                      • Client proposition
                                                                                                                                        • Key financial data
                                                                                                                                          • Figure 22: Hargreaves Lansdown – key annual data, 2013-14
                                                                                                                                        • Recent activity
                                                                                                                                          • Brewin Dolphin
                                                                                                                                            • Description
                                                                                                                                              • Position in the market
                                                                                                                                                • Client proposition
                                                                                                                                                  • Key financial data
                                                                                                                                                    • Figure 23: Brewin Dolphin Holdings – key annual data, 2012-13
                                                                                                                                                  • Recent activity
                                                                                                                                                    • Openwork
                                                                                                                                                      • Description
                                                                                                                                                        • Position in the market
                                                                                                                                                          • Client proposition
                                                                                                                                                            • Key financial data
                                                                                                                                                              • Figure 24: Openwork holdings – key annual data, 2012-13
                                                                                                                                                            • Recent activity
                                                                                                                                                              • Intrinsic and Positive Solutions
                                                                                                                                                                • Company description
                                                                                                                                                                  • Position in the market
                                                                                                                                                                    • Client proposition
                                                                                                                                                                      • Key financial data
                                                                                                                                                                        • Figure 25: Intrinsic and Positive Solutions – key annual data, 2011-12
                                                                                                                                                                      • Recent activity
                                                                                                                                                                      • Brand Communication and Promotion

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Intermediaries increase adspend
                                                                                                                                                                            • Figure 26: Advertising expenditure on financial advice services and related products and services, by category, 2010-14
                                                                                                                                                                          • Generic government-backed service accounts for nearly two thirds of the adspend on financial advice
                                                                                                                                                                            • Figure 27: Advertising expenditure on financial advice and guidance services, by top ten advisers, 2012-14
                                                                                                                                                                        • Adviser Business Model

                                                                                                                                                                          • Key points
                                                                                                                                                                            • About Mintel’s financial adviser research
                                                                                                                                                                              • The majority of registered intermediaries provide independent advice…
                                                                                                                                                                                • Figure 28: Current business model, Q3 2014
                                                                                                                                                                              • 41% of consumers say they’d only use an independent adviser
                                                                                                                                                                                • …although the proportion has fallen over the past five quarters
                                                                                                                                                                                  • Figure 29: Current business model, Q3 2013-Q3 2014
                                                                                                                                                                              • Income Generation and Recent Performance

                                                                                                                                                                                • Key points
                                                                                                                                                                                  • Pre-RDR investment business still accounts for over a fifth of adviser income
                                                                                                                                                                                    • Figure 30: Proportion of adviser/firm income generated by pre- and post-RDR business, Q3 2013-Q3 2014
                                                                                                                                                                                  • Over a quarter of financial adviser revenues are facilitated via platforms
                                                                                                                                                                                    • Figure 31: Proportion of adviser/firm income generated by fund platforms, product sales, direct client payments and commission, Q3 2013-Q3 2014
                                                                                                                                                                                  • The financial performance of firms has improved over the past year
                                                                                                                                                                                    • Figure 32: Change in annual income over the past year, Q3 2013-Q3 2014
                                                                                                                                                                                • Client Movement

                                                                                                                                                                                  • Key points
                                                                                                                                                                                    • The vast majority of investment advisers have taken on new clients over the past year…
                                                                                                                                                                                      • Figure 33: Client acquisition and loss over the past 12 months, August- October 2014
                                                                                                                                                                                    • …but a high proportion have also turned away potential new business or stopped servicing existing clients
                                                                                                                                                                                    • Future Challenges

                                                                                                                                                                                      • Key points
                                                                                                                                                                                        • Coping with increased regulation is the number one headache for investment advisers
                                                                                                                                                                                          • Figure 34: Main challenges expected to face over next 18 months, August- October 2014
                                                                                                                                                                                        • Economic uncertainty magnifies regulatory challenges

                                                                                                                                                                                        About the report

                                                                                                                                                                                        This report will give you a complete 360-degree view of your market. Not only is it rooted in robust proprietary and high-quality third-party data, but our industry experts put that data into context and you’ll quickly understand:

                                                                                                                                                                                        • The Consumer

                                                                                                                                                                                          What They Want. Why They Want It.

                                                                                                                                                                                        • The Competitors

                                                                                                                                                                                          Who’s Winning. How To Stay Ahead.

                                                                                                                                                                                        • The Market

                                                                                                                                                                                          Size, Segments, Shares And Forecasts: How It All Adds Up.

                                                                                                                                                                                        • The Innovations

                                                                                                                                                                                          New Ideas. New Products. New Potential.

                                                                                                                                                                                        • The Opportunities

                                                                                                                                                                                          Where The White Space Is. How To Make It Yours.

                                                                                                                                                                                        • The Trends

                                                                                                                                                                                          What’s Shaping Demand – Today And Tomorrow.

                                                                                                                                                                                        Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

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