Table of Contents
- CHAPTER 1 EXECUTIVE SUMMARY
- Market Context
- Customer Analysis
- Competitor Analysis
- Regulatory Issues
- The Future Decoded
- CHAPTER 2 INTRODUCTION
- What is this report about?
- Who is the target reader?
- How to use this report
- CHAPTER 3 MARKET CONTEXT
- Introduction
- Key findings
- The UK ISA market has experienced its strongest season since 2002
- Impressive sales growth is accompanied by strong and consistent
balance increases
- Strong net retail growth suggests buyers are returning to the market
- Mini ISAs continue to dominate the ISA market
- Stocks and shares make a comeback
- Concern for the future performance of ISAs in a volatile market
- Subscriptions growth has increased between 2004-2005 with the primary
growth area remaining Mini Cash ISAs
- Average values of ISA subscriptions are still below the maximum
allowed, but are starting to increase by a small amount.
- Alternative methods of investment are growing in importance in the ISA
Market
- Fund platforms are playing an increasingly important role
- Fund Supermarkets have experienced a sharp increase in sales
- The next step for development in ISA distribution
- CHAPTER 4 COMPETITION AND CUSTOMERS IN THE ISA MARKET
- Key findings
- Changes within the ISA market have led to a significant shift in the
competitive landscape
- The top ten players have all lost market share with the exception of
Halifax and Fidelity
- The key players within the top 5 remain unchanged, but a shift in
distribution channels is bringing smaller players more opportunity
- Barclays Global and Morley Investment have fallen out of the top ten
as the large players lose share to more flexible participants
- There is little evidence of innovation amongst the larger competitors
- Current offerings remain focused on the lucrative mini cash ISA
- Little innovation is possible within such a saturated market
- Price differentiation remains the predominant form of competition
- The smaller players are developing the market and launching more
innovative products
- New products and markets are seen as a target investment area
- A 2006 change in UK regulations allowing non-UCITs retail schemes to
be held in ISAs has led to high investment in the fast-growing
commercial property sector
- Global Emerging Markets (GEMs) were a top-performing sector in
2005-06
- Commodities markets proved particularly popular due to their strong
performance in 2006
- Customers are demonstrating increased receptivity to fund of funds and
multi-manager ISAs
- Five of the top ten ISA advertisers are among the top ten unit
trust/OEIC fund managers
- Advertising expenditure has a significant impact on sales
- ISA penetration is highly correlated with age and income
- ISAs continue to be under-utilised by low income families
- The regional distribution of ISA holders has remained stable and
evenly spread
- CHAPTER 5 REGULATORY CHANGES IN THE ISA MARKET
- Key findings:
- Non-UCITS retail schemes are now eligible as ISA funds
- FSA regulated retail schemes such as authorised property trusts may
now be included in an ISA provided funds can be accessed within a maximum
period of two weeks
- Changes in UCITS regulations have had a potentially profitable impact
on the commercial property market
- Slowing growth and a peaking market casts doubt on the property
investment sector
- Alternative financial arrangements for some savings products now allow
inclusion in the cash component of an ISA
- Savings products such as Shari'a accounts have recently been given
similar types of return and tax treatment to deposit accounts
- In December 2005 ISA regulations were brought into alignment with Child
Trust Fund rules
- Credit Unions are now allowed to offer ISAs to their members
- Child Trust Fund usage may increase
- CHAPTER 6 THE FUTURE DECODED
- Introduction
- Key findings
- Positive economic conditions are expected to boost savings and
investments balances, creating a healthy environment for continued ISA
growth over the next 5 years
- UK retail savings and investments balances are expected to grow at a
compound annual rate of 7.9% until 2009
- Stabilization in the equity markets will see intermediaries focusing
more on investment products
- Cash and Stocks and Shares ISAs will grow at an equivalent rate
- The forecast for the ISA market is optimistic due to a combination of
regulatory, demographic, and technological factors
- Changes in ISA regulations will allow fund managers greater freedom to
invest
- As the baby boomer generation approaches retirement age, ISA sales
will grow
- As technology advances, enhanced functionality and improved access will
lead to increased sales
- CHAPTER 7 APPENDIX
- Supplementary data
- Definitions
- ABI definitions of distribution channels
- Independent Financial Advisors (IFAs)
- Direct sales forces
- Tied agents
- Multi-tied agents
- Other
- Research methodology
- Flows methodology
- Market share methodology
- Forecasting methodology
- Selecting and projecting the macroeconomic variables
- Further reading
- Datamonitor Savings & Investments SPP Reports
- Interactive Databases
- Reports
- Briefs
- Related Global Wealth Service SPP Reports
- Interactive Databases
- Market Reports
- Strategic Insight Reports
- Wealth Management Competitor Tracker
- SPP writing team
- List of Tables
- Table 1: Market value of funds held in ISAs by component at calendar
year end, 2001-2005 (GBPbn)
- Table 2: Gross ISA sales in the UK, 2001-2005 (GBPmn)
- Table 3: Gross mini ISA sales in the UK, 2001-2005 (GBPmn)
- Table 4: Gross Maxi ISA sales in the UK, 2001-2005 (GBPmn)
- Table 5: Number of new ISA accounts opened in the UK by account type,
2001-2005
- Table 6: Top ten unit trust/OEIC ISA funds under management in the UK
by fund managers, top 30, 2001-2005 (GBPmn)
- Table 7: Top twenty market shares of unit trust/OEIC funds under
management in the UK by fund managers, top 30, 2001-2005
- Table 8: Gross unit trust/OEIC ISA sales split by distribution
channel, 2001-2005 (%)
- Table 9: Fund of funds Unit Trust/OEIC net retail sales by quarter, Q3
2004-Q1 2006 (GBPmn)
- Table 10: Top 10 ISA advertisers in 2005 (GBPmn)
- Table 11: Unit trusts/OEICS are predicted to see the greatest balance
increase by 2010
- Table 12: Total cash ISA balances will remain below 20% of total UK
deposits
- Table 13: Top ten Unit trust/OEIC ISA funds under management in the UK
by fund managers, top 30, 2001-2005 (GBPmn)
- Table 14: Key macro-economic variables forecasted, 2006-2010f
- List of Figures
- Figure 1: After slow growth 2001-2004 ISA balance levels grew strongly
in 2005
- Figure 2: After falling between 2001-2004, ISA sales increased sharply
in 2005
- Figure 3: Mini ISAs account for almost 80% of the UK market in 2005
- Figure 4: Comparison of FTSE 100 performance to total stocks &
shares ISA sales, 2001-2005
- Figure 5: Indexed growth of sales shows positive growth of stocks and
shares
- Figure 6: Mini cash ISAs account for 77% of all new subscriptions
- Figure 7: Average value of ISA subscriptions has increased slightly
since 2004
- Figure 8: In 2005 all the top ten unit trust/OEIC providers lost
market share with the exception of Halifax and Fidelity
- Figure 9: The most popular age for ISA has lowered from 60-64 in 2004
to 55-59 in 2005
- Figure 10: Women's propensity to save decreases with age
- Figure 11: ISA penetration in low income households is decreasing
- Figure 12: The South East retains the highest concentration of ISA
holders, 2004-2005
- Figure 13: The total value of UK retail savings is expected to reach
£2.6trn by 2010
- Figure 14: OEICS are predicted to see significant growth over the next
5 years
- Figure 15: Cash and stocks & shares ISAs will grow at comparable
rates
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