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UK Consumers and Financial Advice market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Consumers and Financial Advice market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

What you need to know

The need for advice is arguably stronger than ever before. Advice is compulsory in almost all new mortgage applications, pension freedoms means people have a wide range of retirement income solutions to choose from, and the low interest rate environment means many savers could benefit from investing. However, consumers appear to be confused about the benefits of advice over guidance, at least in part because of the widespread availability of free information online.

Financial advisers have faced a slew of new regulatory requirements in the last couple of years, including the implementation of recommendations from the FAMR, and the introduction of MiFID II and the GDPR. At the same time, firms have been looking for new ways to reach potential clients. This has been the driving force behind the busy acquisitions activity in the market, and the innovations seen in the digital sphere.

This Report focuses on the UK financial advice market. This includes discussion of the size of the advice market, regulatory developments and innovations in products and services. Mintel’s exclusive consumer research looks at the types of financial advice and guidance used by consumers in the last three years, and the products they used advice for. The Report also examines the main reasons why people haven’t used advice, the types of advice they would be willing to pay for, and general attitudes towards advice.

Expert analysis from a specialist in the field

Written by Richard Shepherd, a leading analyst in the Financial Services sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

New regulations have caused compliance headaches for advisers, but moves to increase transparency and provide clarity over what services are provided by financial advisers should be embraced and used to better highlight the benefits of advice. Richard Shepherd
Senior Financial Services Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Report scope
      • Executive Summary

          • The market
            • 2018 sees slow growth in the retail savings market
              • Figure 1: Total retail savings deposits, 2007-18*
            • Interest rates are set to continue rising, but could be stalled by Brexit
              • Figure 2: UK’s consumer price index, base rate and average weekly earnings growth, October 2008-Sepember 2018
            • UK households are still struggling to save
              • Figure 3: UK households’ cash basis saving ratio and national accounts saving ratio, seasonally adjusted and at current prices, Q1 2014-Q2 2018
            • FCA turns focus to price discrimination and improving switching between platforms
              • The consumer
                • Over 60% have less than £10,000 saved
                  • Figure 4: Value of savings and investments, October 2018
                • 42% save on a regular basis
                  • Figure 5: Current saving activity, October 2018
                • Proportion of savers owning a saving account increases
                  • Figure 6: Savings and investment product ownership, October 2018
                • Nearly half had a savings target in the last year
                  • Figure 7: Saving and investment aims, October 2018
                • Rising interest rates would lead to 48% considering a lesser-known savings provider
                  • Figure 8: Attitudes towards saving, October 2018
                • A lack of confidence hampers investment ownership
                  • Figure 9: Non-Investor attitudes towards investing, October 2018
                • Majority are satisfied with their investment performance
                  • Figure 10: Attitudes towards investing, October 2018
                • Struggling savers are looking for assistance
                  • Figure 11: Interest in savings and investment features, October 2018
                • Consumers are unsure about the benefits of robo-advice
                  • Figure 12: Interest in automated services, by savings and investment aims, October 2018
                • What we think
                • Issues and Insights

                  • Scope to extend reach of budgeting services to boost customer engagement
                    • The facts
                      • The implications
                        • Automated advice services will soon be the norm, but inexperienced investors need convincing
                          • The facts
                            • The implications
                            • The Market – What You Need to Know

                              • Growth remains slow, although rate rises should boost market
                                • Interest rates on an upward trajectory
                                  • UK households are still struggling to save
                                    • High street brands launch their own robo-advice services
                                      • FCA turns focus to price discrimination and improving switching between platforms
                                      • Savings and Investment Market Size

                                        • Retail savings deposits break £1.5 trillion
                                          • Figure 13: Total retail savings deposits, 2007-18
                                        • Cash ISAs halt decline while stocks and shares products continue to rise
                                          • Figure 14: Number of ISAs and amounts subscribed, segmented by component type, 2011/12-2017/18
                                        • Net sales of unit trusts and OEICs fall by an estimated 65%
                                          • Figure 15: Retail sales of unit trusts and OEICs-UK domiciled, 2014-18
                                        • Mixed asset funds account for 50% of all sales in 2018
                                          • Figure 16: Retail sales of unit trusts and OEICs-UK domiciled, by asset type, 2008-18
                                      • The Savings and Investment Environment

                                        • Weekly earnings growth moves above inflation
                                          • Rates are on the rise, but Brexit uncertainty persists
                                            • Figure 17: UK’s consumer price index, base rate and average weekly earnings growth, October 2008-Sepember 2018
                                          • Savings ratio on the rise, but savers are still struggling
                                            • Figure 18: UK households’ cash basis saving ratio and national accounts saving ratio, seasonally adjusted and at current prices, Q1 2014-Q2 2018
                                          • Adviser-led platforms dominate the market
                                            • Figure 19: Assets under administration, by distribution channel, 2013-17
                                          • Major brands are looking to expand into robo-advice
                                          • The Regulatory Environment

                                            • The Treasury Committee launches a new Investment Management Strategy
                                              • FCA publishes discussion paper on price discrimination…
                                                • …and is also looking to improve switching on investment platforms
                                                • The Consumer – What You Need to Know

                                                  • Over 60% have less than £10,000 saved
                                                    • 42% save on a regular basis
                                                      • Proportion of savers owning a saving account increases
                                                        • Nearly half had a savings target in the last year
                                                          • Rising interest rates would lead to 48% considering a lesser-known savings provider
                                                            • A lack of confidence hampers investment ownership
                                                              • Majority are satisfied with their investment performance
                                                                • Savers who have failed to meet their goals are looking for assistance
                                                                  • Consumers are unsure about the benefits of robo-advice
                                                                  • Value of Savings and Investments

                                                                    • Proportion of savers with less than £10,000 is growing
                                                                      • Figure 20: Value of savings and investments, 2016-18
                                                                    • 50% of under-35s living at home have less than £500 in savings
                                                                      • Empty Nesters are valuable customers, but are hard to engage
                                                                      • Current Saving Activity

                                                                        • Millennials are the most active savers
                                                                          • Scope to increase saving activity among Gen X and Baby Boomers
                                                                            • Figure 21: Current saving activity, October 2018
                                                                          • Home owners more likely to commit to saving regularly
                                                                            • Figure 22: Current saving activity, by housing situation, October 2018
                                                                        • Savings and Investment Product Ownership

                                                                          • Savings account ownership is widespread
                                                                            • Figure 23: Savings and investment product ownership, October 2018
                                                                          • Scope to grow investment ownership among mid-range savers
                                                                            • Figure 24: Saving and investment product ownership, by value of savings and investments, October 2018
                                                                        • Approach to Saving and Investing

                                                                          • Just under half have saving or investment aims
                                                                            • Figure 25: Saving and investment aims, October 2018
                                                                          • 69% have met or exceeded their saving or investment aims
                                                                            • Figure 26: Saving and investment progress, October 2018
                                                                          • Inexperienced savers need more help
                                                                            • Figure 27: Saving and investment progress, by value of savings and investments, October 2018
                                                                        • Attitudes towards Saving

                                                                          • Almost half would consider a lesser-known provider
                                                                            • Figure 28: Attitudes towards saving, October 2018
                                                                          • Regular savers are likely to increase their savings activity and keep a lookout for a better deal
                                                                            • Figure 29: Agreement with attitudes toward saving, by frequency of saving activity, October 2018
                                                                        • Non-Investors Attitudes towards Investing

                                                                          • Almost three quarters are uncomfortable putting their savings at risk
                                                                            • Low level investments to attract new customers
                                                                              • Figure 30: Non-Investor attitudes towards investing, October 2018
                                                                            • Millennials are more likely to consider impact of Brexit
                                                                              • Figure 31: Response to the statement ‘recent market uncertainty around Brexit puts me off investing’, by generation, October 2018
                                                                          • Investor Attitudes toward Investing

                                                                            • Investors show a willingness to consider a lesser-known brand
                                                                              • Investors split on whether to increase their investment activity
                                                                                • Figure 32: Attitudes towards investing, October 2018
                                                                              • Majority with savings goal are satisfied with their investment performance
                                                                                • Figure 33: Agreement with attitudes toward investing, by saving and investment aims, October 2018
                                                                            • Interest in Saving and Investment Features

                                                                              • Regular product updates the most popular feature
                                                                                • Figure 34: Interest in savings and investment features, October 2018
                                                                              • Savers who have failed to meet their goals are looking for assistance
                                                                                • Figure 35: Interest in savings and investment features, by saving and investment progress, October 2018
                                                                            • Interest in Automated Advice Services

                                                                              • Consumers split over interest in automated advice
                                                                                • Existing investors are more positive
                                                                                  • Figure 36: Attitudes towards automated advice services, October 2018
                                                                                • Parents with investment experience are strong prospects
                                                                                  • Figure 37: Consumers Saving and Investing – CHAID – Tree output, October 2018
                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                  • Abbreviations
                                                                                    • Consumer research methodology