Tulip: Investment Advisers to the Wealthy - UK

Published by: Mintel International Group Ltd.

Published: Jan. 1, 2007 - 58 Pages

Table of Contents

1. Introduction

1.1 Wealth distribution in the UK

Figure 1: Liquid asset2 ownership within the wealthiest 5% of UK adults

Figure 2: The shares of UK liquid assets owned by the UK’s wealthiest 5%: The mass affluent, the HNWs & the Ultra HNWs, 2001 compared with 2006

1.2 The gender factor in HNW/Ultra HNW investment

Figure 3: The comparative demographics of HNWs and their advisers

2. Executive Summary

Advisers, not HNWs or Ultra HNWs

The influence of advisers

The investment service provided by advisers

Portfolio structuring

Portfolio recommendations and the influence of commission

The threat of online and personal communications technology

3. The Influence of Professional Investment Advisers

Figure 4: HNW & Ultra HNW use of professional investment advisers

Figure 5: HNW & Ultra HNW approaches to investment decision making

Figure 6: HNW & Ultra HNW investment decision making: the advisers’ view

4. The Investment Services of Professional Investment Advisers

Figure 7: Services offered by investment advisers

4.1. The investment recommendations of advisers

Figure 8: Investment categories advised on equally by IFAs and private asset managers

Figure 9: Investments advised on more widely by IFAs than private asset & investment managers

Figure 10: Investments advised on more widely by private asset managers/investment managers/banks than IFAs

5. The Variations in the Investment Recommendations of Advisers

Figure 11: The six top recommendations of IFAs and private asset & investment managers

Figure 12: The recommendations with most variance between IFAs and private asset managers/private investment managers

6. Adviser Recommendations versus Actual HNW & Ultra HNW Investments

Figure 13: The top six adviser HNW/Ultra recommendations versus HNW/Ultra HNW actual investments

Figure 14: The top six investments owned by HNWs or Ultra HNWs versus the top six HNW/Ultra HNW adviser recommendations

7. Asset Allocations: Adviser Recommendations versus Ownership

Figure 15: The principal asset allocations of HNWs & Ultra HNWs versus advisers’ recommendations

7.1. The issue of impartiality

Figure 16: The top asset allocations of HNWs & Ultra HNWs versus advisers’ recommendations

Figure 17: The impact of commission on HNW/Ultra HNW adviser recommendations

8. The Threat of Increased Media and Online Investment Advice

Figure 18: The online & media threat to professional advisers

Figure 19: The online & media threat to professional advisers

Figure 20: The online & media threat to professional advisers

Figure 21: Acquiring new clients

Figure 22: The essential services offered by professional advisers

Figure 23: The principal qualities & skills sought from an investment adviser?

Figure 24: Most wealthy clients use the media extensively for investment advice: which would you advise your clients to make most use of? And which one provides the most useful and relevant information for wealthy clients?

9. Client Investment Skills and Knowledge

Figure 25: How would you rate overall the investment skills and knowledge of most of your wealthy clients?

Figure 26: The adviser ratings of twelve major fund managers

Appendix One

The Tulip Wealth Models - 2002 and 2006 Versions

The Sunday Times Rich Lists 2002-06

Appendix Two

Technical note

Appendix Three

About Tulip Financial Research Ltd

Appendix Four

Data tables 1-23

Table 1: Q3: Which of these services do you or your company advise on for your wealthy clients?, by profile

Table 2: Q4: Which of these kinds of investment do you or your company advise on or manage for your clients? by profile

Table 3: Q5A: Which of these fee arrangements do you offer to your clients?, by profile

Table 4: Q5B: And which one do you prefer for your wealthy clients?, by profile

Table 5: Q6: Generally speaking do the majority of your wealthy clients…? by profile

Table 6: Q7: How would you rate overall the personal investment skills and knowledge of most of your wealthy clients?, by profile

Table 6: Q7: How would you rate overall the personal investment skills and knowledge of most of your wealthy clients?, by profile

Table 7: Q8: Thinking now of a typical wealthy client with, say, £400,000 liquid, aged around 50 to 55, cautious but prepared to take some risks: which of these investments do you think should definitely be part of his or her portfolio nowadays?, by profile

Table 8: Q9: Thinking now of the investments you said should be in that client’s portolio, approximately how much out of every £1,000 of their investments should be invested in?, by profile

Table 9: Q10A: I will now read out the names of twelve of the largest and best-known fund managers available in the UK. For each one tell me whether you often recommend their financial products to your clients?, by profile

Table 10: Q10B: And do you rate their products overall as excellent/good?, by profile

Table 10: Q10B: And do you rate their products overall as excellent/good?, by profile

Table 11: Q10C&D: Here are seven principal qualities & skills wealthy investors look for from their financial advisers? Which are your top two most important to your wealthy clients?, by profile

Table 12: Q11A: About how often do you and your colleagues talk to your own wealthy clients, either by phone or in person?, by profile

Table 13: Q11B: These are six services offered by many professional financial advisers. For each one tell me whether you offer it?, by profile

Table 14: Q11C: And do you think (read out service) is essential/very important to your wealthy clients?, by profile

Table 14: Q11C: And do you think (read out service) is essential/very important to your wealthy clients?, by profile

Table 15: Q11D: How would you rate overall the personal investment skills and knowledge of your wealthy clients?, by profile

Table 16: Q12A: Most wealthy clients use the media extensively for financial information and advice, and some use the media instead of professional financial advisers. Which of these media would you advise your wealthy clients to make most use of?, by profile

Table 17: Q12B: And which one do you feel can provide the most relevant and useful information for wealthy investors?, by profile

Table 18: Q13: Do you think that online facilities, from advisory websites through to online brokerage and execution only services, plus the wide media coverage of all aspects of finance and investment, provide a threat to the future business and profitability of IFAs, private banks and asset managers as investment advisers and managers to the wealthy? Is that a major threat or a minor threat?, by profile

Table 18: Q13: Do you think that online facilities, from advisory websites through to online brokerage and execution only services, plus the wide media coverage of all aspects of finance and investment, provide a threat to the future business and profitability of IFAs, private banks and asset managers as investment advisers and managers to the wealthy? Is that a major threat or a minor threat?, by profile

Table 19: Q14: Do you agree a lot/a little that this kind of threat from online services and financial coverage in the media will...,by profile

Table 20: Q15A: Which of these methods do you and your company use nowadays to attract new business?, by profile

Table 21: Q15C: And which will be most important in the future - say in two or three years time?, by profile

Table 22: Q16: And one final question: Do you believe that the levels of commission offered by financial product providers sometimes compromise the advice given by professional financial advisers? If yes - and does this happen often, occasionally or very rarely?, by profile

Table 22: Q16: And one final question: Do you believe that the levels of commission offered by financial product providers sometimes compromise the advice given by professional financial advisers? If yes - and does this happen often, occasionally or very rarely?, by profile

Table 23: Q27: Which of these categories best describes your business?, by profile

Abstract

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