The Spanish 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
  • Financial advice in Spain is dominated by the banks
    • Some business banks with private divisions classify themselves as independent advisors
    • There are few independent advisors in the Spanish market as a result of insufficient regulation
    • There were just under 32,000 non-bank financial intermediaries in the Spanish market in 2005
    • Spain is home to approximately 4% of the total European financial advisor community
    • Compared to Europe as a whole, the Spanish financial advice market is dominated by single-tied advisors
    • 97% of financial advisors in Spain are remunerated on a commission-fee basis
  • Banks are the most important channel for distribution of financial services products in the Spanish financial advice market
    • The density of the branch networks are the key to the success of the retail banks
    • Other channels are a marginal presence in the Spanish market
    • Cuts in capital gains tax in January 2007 may change the investment habits of Spanish investors
    • The Spanish financial advice market is fragmented and thus regulation has only had an effect on the banking channel
    • Financial advisors are mostly tied to banks, so tend to offer the banks' own products
    • Hedge fund regulation has recently been introduced into the domestic market by CNMV
  • Data
• CHAPTER 3 REGULATORY DEVELOPMENTS
  • Introduction
  • Key findings
    • CNMV is the main regulatory body for financial advisors in the Spanish market
    • CNMV has enforced no regulatory reforms aimed specifically at the advisory market over the last five years
    • AIF & ANAF are the two associations that have been actively promoting increased awareness of the advisory industry
  • The European Commission has introduced a number of regulatory reforms affecting the financial advice distribution channel in Spain in recent years
    • The Financial Services Action Plan
    • Insurance Mediation Directive
    • UCITS III
    • Markets in Financial Instruments Directive (MiFID)
    • The MiFID directive is expected to have an impact but many firms believe they were compliant well before its arrival
      • Creation of a financial advice certificate may go some way towards allaying investor trust issues
    • Although MiFID is a step forward for financial advice, it is not necessarily the answer to their problems
    • 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 AIF has called for more regulation of issues related to financial advisers
• CHAPTER 4 COMPETITOR DYNAMICS
  • Introduction
  • Key findings
    • BBVA (Banco Bilbao Vizcaya Argentaria) is one of the two biggest financial advisory banks in Spain
    • BBVA has pushed a significant proportion of its workforce through advisory training schemes
    • Santander' s prowess lies in its extensive subsidiary network
    • Renta 4 was voted the best internet-based intermediary in 2005
• CHAPTER 5 OPPORTUNITIES
  • Introduction
  • Key findings
    • Spain is a market characterised by limited opportunities for new entrants
    • Firms looking at entering the Spanish market should focus their efforts on portfolio management, wealth advice and tax planning
    • New entrants should look towards acquisition to establish a foothold in the market
    • Or perhaps take a more specialized approach by targeting family financial planning or the upper end of the mass market customer base
    • Firms can better supply financial advisors through adequate training and education
    • Banks are expected to continue their domination of the Spanish advisory market, leaving little opportunity for independents
• APPENDIX
  • Definitions
  • Further reading
    • Financial Advice Market SPP
    • Savings and Investments SPP
      • Interactive Databases
      • Reports
      • Briefs
    • Global Wealth Management SPP
      • Interactive Databases
      • Market Reports
      • Strategic Insight Reports
      • Wealth Management Competitor Tracker
    • Datamonitor Asia Pacific Wealth Management SPP
  • SPP writing team
  • List of Tables
    • Table 1: Spanish intermediaries, split by channel, 2005
    • Table 2: European intermediaries remunerated on a purely fee-basis
    • Table 3: Number of Spanish intermediaries, segmented by group, 2005
    • Table 4: Total number of intermediaries & institutions, segmented by country, 2005
    • Table 5: Distribution of mutual funds in the Spanish market by distribution channel, 2006
  • List of Figures
    • Figure 1: Individual intermediaries made up the largest advisory group in the Spanish market in 2005
    • Figure 2: Individual intermediaries made up the largest non-bank advisory group in the Spanish market in 2005
    • Figure 3: Spain has the 4th highest number of intermediaries in Europe but this represents just 4% of the total EU market share
    • Figure 4: Single-tied advisors dominated the Spanish non-bank advisory channels in 2005
    • Figure 5: Spain has a minor proportion of intermediaries remunerated on a purely fee-basis
    • Figure 6: The retail bank is the dominant channel for the distribution of mutual funds in Spain