Wealth Management and Private Banking - UK - January 2008

Table of Contents

• Issues in the Market
• Market in Brief
• Key points
• A segmented market...
• ...and a growing market
  • Figure 1: Population of high net wealth individuals, 2005 and 2006
• Markets enter a volatile period
  • Figure 2: FTSE 100 index, 1988-2008
• Growing revenues
  • Figure 3: Revenue growth, by subsector, 2003-06
• High earners are engaged, interested and knowledgeable
  • Figure 4: Attitudes towards investing, January 2008
• The owner/operator
  • Figure 5: Occupational make-up high net worth individuals, by investible assets, July 2007
• Internal Market Environment
• Key Points
• SIPPs driving interest
  • Figure 6: Product ownership, December 2007-January 2008
• Asset allocation
• Client recruitment -- building relationships...
• ...with staff quality paramount
• A renewed push
• Treating Customers Fairly
• London as the furnace
• Broader Market Environment
• Key Points
• Varying opinions on what 2008 holds
• The government moves to ease interest rate fears
  • Figure 7: Bank of England Base rate, 1985-2007
• The FTSE had enjoyed a strong run, until now
  • Figure 8: FTSE 100 index monthly close, 1988-2008
• Disposable income growth still looks good for future
  • Figure 9: Growth in PDI, 2002-12
• Growth forecast in the number of ABs
  • Figure 10: Socio-demographic composition of United Kingdom, adults aged 15+, 2006-12
• Influences on consumer confidence
  • Figure 11: Consumer confidence-influencing investment behaviour, 2008
• Competitive Context
• Key Points Summary:
• The IFA and the high street bank
  • Figure 12: Sources of wealth management advice, 2006
• Online
• Property investing
  • Figure 13: Investment ownership, June 2007
  • Figure 14: Size of the buy-to-let market, 2000-07 (H1)
• Strengths and Weaknesses in the Market
• Strengths
• Property investing is losing its sparkle
• Investors remain committed to staying invested
• Continuing growth in the need for professional advice
• Population of wealthy is growing strongly
• SIPPs set up
• Weaknesses
• Economic and financial markets' instability
• Raft of new and sophisticated products and changes in regulations intimidate some consumers
• Mass-market availability of products
• Internet making self-management possible
• Market Size
• Key Points
• Strong growth
  • Figure 15: Total wealth management sector, 2005 and 2006
• From mass affluent to super rich
  • Figure 16: Liquid asset* ownership within the wealthiest 5% of UK adults, 2001 and 2006
• Portfolio size
  • Figure 17: Population, by portfolio size, 2006
• Sub-sector growth
  • Figure 18: Market growth, 2005 and 2006
• Mandate type
  • Figure 19: Asset control, 2004-06
• Segment Performance
• Key Points
• Revenue by sub-sector
  • Figure 20: Revenues, by sub-sector, 2003-06
• Assets by type of firm
  • Figure 21: Assets, by firm, 2004-06
• Types of accounts used
  • Figure 22: Tax wrapper, 2006
• Investment types
  • Figure 23: Investment type, 2006
• Revenues sources -- Execution only execution-only brokers
  • Figure 24: Execution-only brokers' revenue divisions, 2000 and 2006
• Revenue sources -- Full-service brokers
  • Figure 25: Full-service brokers' revenue divisions, 2000 and 2006
• Market Share
• Key Points
• Big names dominate
  • Figure 26: Assets, by firm size, 2006
• Industry table
  • Figure 27: Assets under management, 2007
• Companies and Products
• Key Points Summary:
• Minimum assets required
  • Figure 28: Minimum investible assets required, 2007
• Barclays Wealth
• Coutts & Co
• Brewin Dolphin
• Schroders
• Brand Communication and Promotion
• Key Points
• Minimal above-the-line adspend
  • Figure 29: Adspend on press, television, radio, print and outdoor, by selected wealth management service providers and private banks, 2002/03-2006/07
• Secondary advice
  • Figure 30: Sources of financial advice, by liquid assets, 2007
• Channels to Market
• Key Points
• Manager route
  • Figure 31: Market share, by manager, 2006
• Would not use advice
• IFAs are feeling the squeeze
• Stockbroker
• The Consumer -- Product Ownership, Investible Assets, Population and Attitudes
• Key Points
• Population
  • Figure 32: Population of households earning £100K+, 2000/01-2006/07
• Opportunities and Implications
• Topping the earning charts
  • Figure 33: Product ownership, December 2007-January 2008
• Opportunities and Implications
• Investible assets...
  • Figure 34: Investible assets, December 2007-January 2008
• ...and the link to product ownership
  • Figure 35: Product ownership, by investible assets, December 2007-January 2008
• Implications and opportunities
• Asset maximisation key
  • Figure 36: Feelings about investing and wealth, December 2007-January 2008
• Opportunities and implications
• The Consumer -- Advice
• Key Points
• High street bank still key for high earners
  • Figure 37: Sources of financial advice, December 2007-January 2008
• Opportunities and implications
• Spreading the net
  • Figure 38: Sources of financial advice, by investible assets, December 2007-January 2008
• Opportunities and implications
• Quality of staff holds the secret of success
  • Figure 39: Attributes sought in advice firms, December 2007-January 2008
• Independence -- how important is it?
  • Figure 40: Attributes sought in advice firms, by investible assets, December 2007-January 2008
• Implications and opportunities
• Referral is crucial
  • Figure 41: How adviser was selected, December 2007-January 2008
• Opportunities and implications
• Is there any need for advice?
  • Figure 42: Investment decision-making process, December 2007-January 2008
  • Figure 43: Investment decision-making process, by investible assets, December 2007-January 2008
• Help, not hand holding
• Implications and opportunities
• Appendix -- Minimum Investible Assets Required