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UK Mass Affluent Customers 2003Published by: Datamonitor Published: Feb. 4, 2004 - 150 Pages Table of ContentsTABLE OF CONTENTS EXECUTIVE SUMMARY 3 Market Context 3 Competitive Dynamics 5 Future Decoded 7 INTRODUCTION 22 What is this report about? 22 Who is the target reader? 22 How to use this report 23 MARKET CONTEXT 24 Introduction 24 Market drivers 25 The dynamics of wealth creation 25 Economic and financial backdrop 26 Liquid wealth concentration 29 The UK mass affluent market 30 Market overview 30 Gender segmentation 32 Age segmentation 34 Market size by income band 35 Pre-tax income bands 35 Post-tax income bands 36 Regional affluence analysis 37 Regional house price indicators 38 Regional income indicators 39 Regional investment ownership indicators 41 Market data tables 43 The UK mass affluent market 43 Market size by income bands 53 Regional analysis data 54 COMPETITIVE DYNAMICS 60 Introduction 60 Competitive landscape 60 Private client wealth managers 62 Focus and identification 62 Issues and developments 64 SWOT Analysis 68 Company snapshot: Close Wealth Management 68 Stockbrokers 70 Focus and identification 70 Issues and developments 71 SWOT Analysis 74 Company snapshot: Barclays Stockbrokers 75 Retail asset managers 78 Focus and identification 78 Issues and developments 79 SWOT Analysis 82 Company snapshot: ISIS 83 Retail banks 86 Focus and identification 86 Issues and developments 89 SWOT Analysis 90 Company snapshot: Lloyds TSB Premier 91 Online banks 93 Focus and identification 93 Issues and developments 94 SWOT Analysis 96 Company snapshot: Egg 96 IFAS 99 Focus and identification 99 Issues and developments 101 SWOT Analysis 104 Company snapshot: Chase De Vere Financial Soluions 105 Fund supermarkets 107 Focus and identification 107 Issues and developments 108 SWOT analysis 109 Company snapshot: Ample 110 Summary of competitive standing 113 Dimension 1: competition for asset stocks 113 Dimension 2: competition for investment activities 114 Dimension 3: competition for customer types 116 Data tables 118 Private client wealth managers 118 Retail asset managers 119 Stockbrokers 121 Retail and online banks 121 IFAS 125 Fund supermarkets 127 Advertising spend 128 FUTURE DECODED 132 Introduction 132 Economic and financial outlook 132 Forecast assumptions 132 Mass affluent sector forecasts: neutral scenario 134 Forecast data tables 137 Neutral scenario 137 Pessimistic scenario 138 Optimistic scenario 139 ACTION POINTS 140 APPENDIX 142 Definitions 142 Research Methodology 145 New developments to the Global Wealth Model 145 The New Methodology 145 The UK sub model 146 Differences to the old model 146 Forecasting methodology 146 Further information 146 Further reading 147 Datamonitor Reports 147 Datamonitor Global Wealth Service: Insight reports 147 Datamonitor Global Wealth Service: Competitor Tracking 147 Datamonitor Financial Services Consulting 148 SPP writing team 149 LIST OF TABLES Table 1: Definitions 24 Table 2: Number of UK mass affluent individuals by liquid asset band, 1997-2002e 43 Table 3: Aggregate liquid assets of UK mass affluent individuals segmented by liquid asset band, 1997-2002e 43 Table 4: Number of UK mass affluent individuals segmented by gender, 1997-2002e 44 Table 5: Aggregate liquid assets of UK mass affluent individuals segmented by gender, 1997-2002e 44 Table 6: Number of Male mass affluent individuals by liquid asset band, 1997-2002e 45 Table 7: Aggregate liquid assets of male mass affluent individuals segmented by liquid asset band, 1997-2002e 45 Table 8: Number of female mass affluent individuals by liquid asset band, 1997-2002e 46 Table 9: Aggregate liquid assets of female mass affluent individuals segmented by liquid asset band (GBP), 1997-2002e 46 Table 10: Number of UK mass affluent individuals segmented by age band, 1997-2002e 47 Table 11: Aggregate liquid assets of UK mass affluent individuals segmented by age band, 1997-2002e 47 Table 12: Number of 18- 45 year old mass affluent individuals by liquid asset band (GBP), 1997-2002e 48 Table 13: Aggregate liquid assets of 18- 45 mass affluent individuals segmented by liquid asset band (GBP), 1997-2002e 48 Table 14: Number of 46- 55 year old mass affluent individuals by liquid asset band (GBP), 1997-2002e 49 Table 15: Aggregate liquid assets of 46- 55 mass affluent individuals segmented by liquid asset band (GBP), 1997-2002e 49 Table 16: Number of 56- 65 year old mass affluent individuals by liquid asset band (GBP), 1997-2002e 50 Table 17: Aggregate liquid assets of 56- 65 mass affluent individuals segmented by liquid asset band (GBP), 1997-2002e 50 Table 18: Number of 66- 75 year old mass affluent individuals by liquid asset band (GBP), 1997-2002e 51 Table 19: Aggregate liquid assets of 66- 75 mass affluent individuals segmented by liquid asset band (GBP), 1997-2002e 51 Table 20: Number of 75+ year old mass affluent individuals by liquid asset band (GBP), 1997-2002e 52 Table 21: Aggregate liquid assets of 75+ mass affluent individuals segmented by liquid asset band (GBP), 1997-2002e 52 Table 22: Number of affluent earners and total value of income, segmented by pre-tax total income band, 1998-2002 53 Table 23: Number of affluent earners and total value of income, segmented by post-tax total income band, 1998-2002 53 Table 24: Standard average house price, segmented by region, 1997-2002 54 Table 25: Standard average house price, indexed 1997=100, segmented by region, 1997-2002 55 Table 26: Standard average house price versus house price growth segmented by region, 1997-2002 56 Table 27: Number of individuals with pre-tax earned income over £50,000 and total value of pre-tax earned income for this segment, by region, 2000 57 Table 28: Proportion of total UK population in each region compared to proportion of total £50,000+ segment in each region, 2000 58 Table 29: Proportion of households with shares compared to proportion of total British population in each region, 2001 59 Table 30: Proportion of households with unit trusts compared to proportion of total British population in each region, 2001 59 Table 31: Account thresholds for Barclays Stockbrokers services 76 Table 32: Breakdown of ISIS Asset Management funds under management, September 30th 2003 84 Table 33: Performance of ISIS Asset Management funds as at 14th January 2003 85 Table 35: Egg’s customer numbers, December 1999-December 2002, UK only 97 Table 36: Ample’s partners and associations for different product/service areas, December 2003 112 Table 37: Competitor data for the top 25 UK private client wealth managers, 2002 118 Table 38: Gross retail sales of unit trusts/OEICS by distribution channel, 2002 119 Table 39: Total unit trust/OEIC funds under management (£m) 2001-2002 120 Table 40: Beneficial ownership of UK shares, £ billion, 1998-2002 121 Table 41: Current account rates for selected retail and online banking players, December 2003 121 Table 42: Savings account rates for selected retail and online banking players, December 2003 122 Table 43: Historic and forecast number of internet banking customers 122 Table 44: UK personal deposit account balances by competitor, 1997-2001 123 Table 45: Total advertising spending by UK Internet banks, 1999-2002 124 Table 46: Number of online banking customers by competitor, March 2003 124 Table 47: Top 25 UK IFAs by turnover, 2002 125 Table 48: Number of IFA firms by turnover band, 2002 126 Table 49: Percentage of total IFA turnover attributable to different product and service lines, 2002 126 Table 50: Number of funds and fund managers offered by selected fund supermarkets, 2003 127 Table 51: Top 25 companies by advertising spend on savings accounts, 2002 128 Table 52: Top 25 companies by advertising spend on unit and other trusts, 2002 129 Table 53: Top 25 companies by advertising spend on general investment schemes, 2002 130 Table 54: Top 25 companies by advertising spend on asset management, 2002 131 Table 55: Development of macroeconomic indicators, neutral scenario 133 Table 56: Development of macroeconomic indicators, pessimistic scenario 133 Table 57: Development of macroeconomic indicators, optimistic scenario 134 Table 58: Forecasted number of UK mass affluent individuals, neutral scenario, segmented by liquid asset band (GBP), 2002-2007 137 Table 59: Forecast liquid assets of UK mass affluent individuals, neutral scenario, segmented by liquid asset band (GBP), 2002-2007 137 Table 60: Forecast number of UK mass affluent individuals, pessimistic scenario, segmented by liquid asset band (GBP), 2002-2007 138 Table 61: Forecasted liquid assets of UK mass affluent individuals, pessimistic scenario, segmented by liquid asset band (GBP), 2002-2007 138 Table 62: Forecast number of UK mass affluent individuals, optimistic scenario, segmented by liquid asset band (GBP), 2002-2007 139 Table 63: Forecast liquid assets of UK mass affluent individuals, optimistic scenario, segmented by asset band (GBP), 2002-2007 139 LIST OF FIGURES Figure 1: Key drivers result in a CAGR of 2.4 per cent for total retail liquid assets, 1997-2002 3 Figure 2: The number of mass affluent individuals has fallen since 2000 4 Figure 3: Service propositions and ownership structures competing the in the mass affluent savings and investment space 6 Figure 4: Competition for different pools of assets 7 Figure 5: 7.1m mass affluent individuals will hold GBP 474.7bn in onshore liquid assets by 2007 8 Figure 6: The dynamics of mass affluent wealth creation 25 Figure 7: Key drivers result in a CAGR of 2.4 per cent for on total retail liquid assets, 1997-2002 27 Figure 8: Retail deposits have gained in the market turbulence, while direct retail bond and equity holdings have lost out 28 Figure 9: The mass affluent share of total retail liquid assets has strengthened over the last 5 years 29 Figure 10: Breakdown of mass affluent individuals and assets by liquid asset band (GBP), 2002 30 Figure 11: The number of mass affluent individuals has fallen since 2000 31 Figure 12: The value of mass affluent liquid assets has grown at a CAGR of 3.6 percent between 1997 and 2002 32 Figure 13: Females account for a greater percentage of the mass affluent segment but males on average are richer, 1997-2002 33 Figure 14: 18-45 year olds account for an increasing share of the mass affluent segment 34 Figure 15: Number of affluent earners, segmented by pre-tax total income band, 1998-2002 36 Figure 16: Number of affluent earners segmented by post-tax total income band, 1998-2002 37 Figure 17: House price indicators suggest the south and east of England to be among the UK’s most attractive affluent regions 39 Figure 18: The highest concentrations of affluent earners are in London, the South East and the East of England 40 Figure 19: The South East is the region with largest population and the highest propensity to own shares 41 Figure 20: Only regions in the south and east of England have above average unit trust ownership 42 Figure 21: Service propositions and ownership structures competing the in the mass affluent savings and investment space 61 Figure 22: Barclays’ acquisition of Gerrard will make it one of the dominant players in the mass affluent sector 63 Figure 23: Investment thresholds are not highly indicative of client loading ratios and average portfolio sizes, 2002 65 Figure 24: Average portfolio sizes dictate the economics of client relationship management, 2002 66 Figure 25: SWOT Analysis: Private client wealth managers 68 Figure 26: Return by composite portfolio, 4.5 years to 30th September 2003 69 Figure 27: Value and proportion of beneficial share ownership attributable to individuals has declined, 1998-2002 71 Figure 28: Execution-only trading has taken a beating in the bear markets, peaking in 2000 and steadily declining since then 72 Figure 29: Stockbrokers offering flat fee structures, April 2003 73 Figure 30: SWOT Analysis: Retail stockbrokers 75 Figure 31: The mechanism behind Barclays Stockbrokers Price Improver 77 Figure 32: Fidelity leads the pack in terms of unit trust/OEIC funds under management, 2002 78 Figure 33: Total retail sales of unit trusts/OEICS are dominated by the intermediary channel, 2002 81 Figure 34: SWOT Analysis: Retail asset managers 82 Figure 35: Together, the top four savings account providers account for over half the UK deposit market 86 Figure 36: Premier banking income and asset thresholds vary slightly between the big four retail banks 88 Figure 37: SWOT Analysis: Retail banks 91 Figure 38: Egg is the largest Internet bank, but Barclays has more online banking customers 93 Figure 39: There are forecast to be 15.5m online banking customers in the UK by 2007 95 Figure 40: SWOT Analysis: Online banks 96 Figure 41: Egg’s advertising spend in 2002 amounted to £17.5 million 98 Figure 42: Savings and investments account for a limited percentage of IFA turnover relative to life, pensions and insurance products 100 Figure 43: Leading IFAS by turnover, 2002 101 Figure 44: Lawyers and accountants are the most popular choice for partnership potential 103 Figure 45: SWOT Analysis: Independent Financial Advisers 105 Figure 46: Fund offerings of selected fund supermarkets, December 2003 107 Figure 47: The range of product and services offered alongside competitors’ fund supermarkets, December 2003 109 Figure 48: SWOT Analysis: Fund supermarkets 110 Figure 49: Ample’s approach to investments is for self directed investors 111 Figure 50: Competition for different pools of assets 113 Figure 51: Relative Strength and involvement in key savings and investment activities by different competitor types 115 Figure 52: Relative strength and involvement of different competitor-types in targeting customer groups 117 Figure 53: 7.1m mass affluent individuals will hold GBP 474.7bn in onshore liquid assets by 2007 135 Figure 54: Growth in the number of mass affluent individuals is forecast to be at an average of 6.7 per cent per annum through 2007 136 Figure 55: Growth in the value of mass affluent liquid assets is forecast to be slightly higher than the number of individuals 136 AbstractIntroductionUK Mass Affluent Customers 2003 is Datamonitor’s key report covering the UK mass affluent savings and investment marketplace. Building on the resources and expertise of Datamonitor's Global Wealth Service team, the latest report is data-rich, and provides in-depth and impartial market assessment, competitor intelligence and forecasts for the UK mass affluent sector. Scope Assess the size and composition of the UK mass affluent market in terms of the number of individuals and the liquid assets they hold. Data is segmented by age and gender and split across 4 liquid assets bands, starting at GBP30,000 and rising to GBP200,000. Covers full range of competitor types: wealth managers premier banks, online banks, stockbrokers, retail asset managers, fund supermarkets and IFAs. Directly focused on the UK savings and investments market for mass affluent customers including deposits, equities, bonds, unit trusts. Reasons to Purchase Detailed data covering market size allows wealth manager’s to compare the impact of the turbulent market environment on the UK mass affluent sector Decipher the complicated competitive picture thanks to extensive data and analysis covering the key competitive trends and issues In depth forecasts highlight the most attractive mass affluent segments to target for future investment under varied economic scenario Report Highlights Mass affluent individuals (those with GBP30,000-200,000 in liquid assets) make up nearly 11% of the total UK adult population and hold approximately GBP340 bn in onshore liquid assets. From a base of 4.4 m in 1997 the number of mass affluent individuals in the UK has grown to reach 5.1m in 2002, a compound annual growth rate of 3.0 per cent. The competitive landscape in the UK mass affluent savings and investment space is highly complex with a range of service propositions competing to a greater or lesser extent for mass affluent customers and assets. These include private client wealth managers, IFAs, stockbrokers, retail asset managers, fund supermarkets, retail and online banks. Savings and investments are vitally important for asset rich customers, but product ranges cannot be based purely focused around equity. Instead propositions must be extended in areas such as banking, lending and alternative investments. This will allow players to increase share of wallet, diversify revenues and propose a wider solution to clients. Get Full Details About This Report >> |
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