The French Financial Advice Market 2007

Table of Contents

• EXECUTIVE SUMMARY
  • Market Structure
  • Regulatory Developments
  • Competitor dynamics
  • Opportunities
• CHAPTER 1 INTRODUCTION
  • What is this report about?
  • Who is the target reader?
  • How to use this report
• CHAPTER 2 MARKET STRUCTURE
  • Introduction
  • Key findings
  • The financial advisory distribution channel in France is one of the smallest in Europe
    • Financial advisors have struggled to establish their own market niche
    • There are currently only around 1,300 active advisors in France
    • France is home to just 0.8% of the total European financial intermediary community
    • Compared to Europe as a whole, the French channel is dominated by single-tied advisors
    • Over 95% of financial advisors in France are compensated on a commission-basis at some level
  • Banks are the most important channel for distribution of financial services products in the French market
    • France is the biggest bancassurance market in Europe
      • Bancassurance in France has evolved into a sophisticated channel
    • The French life and pensions market has experienced strong growth since 2005, but banks have swallowed most of the benefits
      • Less than 10% of life and pensions distribution in France goes through independent channels
    • Banks retain a firm grip on sales of mutual funds
      • Customer loyalty makes entry difficult
• CHAPTER 3 REGULATORY DEVELOPMENTS
  • Introduction
  • Key findings
  • There is no main body regulating the French financial services industry
    • The financial advice market is largely unregulated
    • New legislation was introduced in 2004 aimed specifically at financial advisors
  • The European Commission has introduced a number of regulatory reforms affecting the financial advice distribution channel in France in recent years
    • The Financial Services Action Plan
    • Insurance Mediation Directive
    • UCITS III
    • Markets in Financial Instruments Directive (MiFID)
  • MiFID regulation is likely to have a profound impact on the French financial advice channel
  • The European Commission suggests a regulary ' pause' over the next five years
    • EC simplification project is likely to affect the insurance industry across Europe
  • The financial services industry in France is tired of regulation
    • Trade association membership in France is fragmented
    • ....However, the FECIF takes a leading role in regulatory dissemination and implementation
• CHAPTER 4 COMPETITOR DYNAMICS
  • Introduction
  • Key findings
    • The financial advice market in France is dominated by banks
    • Out of those firms which present a separate financial advice offering, the market is dominated by four main firms
    • Cardif: The largest provider in France
    • Generali: Holds over 4% of the financial advice market
    • AXA: 35% of products distributed through independent advisors
    • Skandia: Works exclusively with independent advisors
    • M&A activity amongst independent and intermediary firms is growing
• CHAPTER 5 OPPORTUNITIES
  • Introduction
  • Key findings
  • France is a market characterised by a dominant banking sector creating limited opportunities for new entrants to leverage financial advisor distribution
    • Firms looking into the French market should concentrate on the opportunities provided by private pensions and wealth management
      • Life product sales are controlled by the banking sector
      • Retail bank asset managers often fulfil the role of financial advisor for mutual fund distribution
      • An growing affluent sector may stimulate the advice channel
      • Private pensions have the most potential for long-term growth
    • Partnerships may be a more efficient entry strategy than acquisitions
    • Regulation may create a more favorable environment for financial advisors in France
      • The key to the development of the financial advice channel could be the legislation on appropriate charging structures
• APPENDIX
  • Supplementary data
  • Definitions
  • Research methodology
  • Further reading
    • Savings & Investments SPP
      • Interactive Databases
      • Reports
      • Briefs
    • Global Wealth Service SPP
      • Interactive Databases
      • Market Reports
      • Strategic Insight Reports
      • Wealth Management Competitor Tracker
    • Life and Pensions SPP
      • Interactive Databases
      • Reports and Briefs
    • Financial Advice Market SPP
  • SPP writing team
  • List of Tables
    • Table 1: Distribution of financial intermediaries and their customer base in France, 2005
    • Table 2: Distribution of European financial advisors, 2005
    • Table 3: European Intermediaries split by channel, 2005
    • Table 4: Overview of the French pensions industry in 2005
    • Table 5: Membership of intermediary trade associations in France
    • Table 6: The top four financial advice distributors in France, 2005
    • Table 7: AXA sales split by distribution channel, based on gross written premiums in 2005
    • Table 8: Skandia unit-linked life products growth 2004-05
    • Table 9: Intermediaries in France, 2005
    • Table 10: European intermediaries remunerated on a purely fee-basis
  • List of Figures
    • Figure 1: Single-tied advisors dominate the French advisory distribution channel
    • Figure 2: Single-tied advisors dominate the French advisory distribution channel
    • Figure 3: The UK has the greatest number of advisors remunerated on a purely fee-basis
    • Figure 4: Retail banks control a relatively small share of mutual fund distribution in France
    • Figure 5: Generali has a large number of subsidiaries in France providing products to its distribution network