Wealth in the UK: Competitive Dynamics 2017
"Wealth in the UK: Competitive Dynamics 2017", report analyzes the UK wealth management market, with a focus on the top 20 competitors and the HNW investor segment. The report uses findings from GlobalDatas 2017 Wealth Managers Survey and 2017 IFA Survey.
The competitive landscape of the UK wealth management industry continues to evolve. Although there are no high-profile new entrants to the market, incumbents have started to feel the pressure from new business models focused on digital channels. As such, traditional wealth managers are looking to enter the robo-advice space. With the onset of MiFID II and Brexit, the Financial Conduct Authority (FCA) aims to address issues of regulatory compliance and improved communication, initiatives that will continue to develop going forward.
Specifically the report includes -
- An overview of the top wealth managers in the UK, based on business model and minimum investment thresholds and ranking based on AUM.
- Recent news related to regulations that pertain to wealth managers. This includes improved communication with consumers, investors with non-domiciled status, technology, and Brexits impact on the UK financial services industry.
- Insight into recent M&A activity, new entrants to the UK market, and divestment activity.
- Product and service innovations, including automated services and personalized offerings.
- The market leaders in terms of assets under management (AUM) are St. Jamess Place, Coutts, and Barclays. The top 20 UK wealth managers focus on the upper end of the market, with the average minimum account threshold standing at 1.25m.
- Fair and accessible advice (also delivered through innovative products) continues to be a key focus for the FCA. The regulator has established a Brexit Taskforce to serve as a checks-and-balances initiative for ensuring the UK remains competitive following the event.
- M&A activity is less frequent than in the past, particularly outside the independent financial advisor (IFA) market.
- New entrants to the UK wealth management markets are mostly digital players. Robo-advisors are offering hybrid solutions to provide best-of-both services to clients.
Reasons to buy
- Benchmark your market share against the top 20 UK performers.
- Understand drivers for AUM growth among leading wealth managers in the UK.
- Gain insight into M&A activity and organic growth for both new entrants and incumbents.
- Understand changes made to UK regulations related to MiFID, inheritance tax, and technology.
- Learn about recent product and service innovations among traditional wealth managers.
- Understand the growth within robo-advice services.
Table of Contents
EXECUTIVE SUMMARY 1
1.1. The UK market leaders remain strong as the push for digital increases 1
1.2. Key findings 1
1.3. Critical success factors 1
2. MARKET STRUCTURE 7
2.1. UK wealth managers use a wide range of business models 7
2.2. Family offices and private banks keep investment thresholds high 9
2.3. Wealth managers are concentrated in London and the South East 10
2.4. The UKs top wealth managers continue to grow their books 11
2.4.1. St. Jamess Place grew because of an expansion in client services 12
2.4.2. Barclays focuses on the UK following the sale of its international arms 12
2.4.3. The largest AUM growth took place outside of the top five competitors 12
2.4.4. Charles Stanleys assets shrank by almost 5% 13
2.4.5. Discretionary investment thresholds remain stable among the top 20 14
3. REGULATORY TRENDS 16
3.1. Consumer advice is a major focal point for FCA regulation 16
3.1.1. The FCA identifies ways to improve the advice market through FAMR 16
3.1.2. FAMR expands its Advice Unit to improve access to a range of advice 17
3.1.3. The FCA seeks to improve communication and digital compliance 17
3.2. The UK regulator is working closely with the industry to support innovation 17
3.2.1. The FCA has tested a third cohort of businesses in its regulatory sandbox 17
3.2.2. The FCA has signed fintech agreements with Hong Kong to support innovation 18
3.3. Financial services providers also need to comply with EU-led regulatory changes 18
3.3.1. The launch date of MiFID II is fast approaching 18
3.3.2. The FCA is urging firms to apply for authorization 19
3.3.3. The RDR has largely paved the way for MiFID II 19
3.3.4. Many UK firms will need to comply with the General Data Protection Regulation regardless of Brexit 20
3.4. The FCA is increasing accountability in the financial services sector 20
3.4.1. In light of Brexit, the FCA has launched an asset management taskforce 20
3.4.2. The FCA has launched ScamSmart to tackle investment scams 20
3.4.3. New rules on whistleblowing for overseas banks were launched in 2017 21
3.4.4. The largest fine in UK regulatory history was imposed for inadequately maintaining AML control 21
3.4.5. Business accountability and culture are key issues in encouraging compliance 22
3.5. Permanent non-domiciled status was terminated in 2017 22
3.5.1. The government also made changes to inheritance tax 23
3.5.2. Further amendments to IHT rules will have an impact on UK property 23
3.6. Regulation- and compliance-focused roles are in demand among financial services providers 24
4. COMPETITIVE TRENDS 25
4.1. M&A Activity 25
4.1.1. The most notable M&A deal was Standard Lifes merge with Aberdeen Asset Management 25
4.1.2. The IFA market continues to experience a slowdown in M&A activity 27
4.2. Organic growth and restructures 28
4.2.1. Wealth managers are strengthening their regional presence 28
4.2.2. Wealth manager restructuring in 2017 centered around better serving clients 29
4.3. New entrants comprised international firms and robo advisors 30
4.3.1. Regardless of business model, competition in the UK is high 30
4.3.2. New robo-advice platforms are entering the UK wealth management space 30
4.4. Product and service innovation 31
4.4.1. Product innovation is centered around digital solutions and robo-advice 31
4.4.2. Wealth managers are responding to the demand for digital advice services 32
4.4.3. Incumbents are investing in robo-advisors 33
4.4.4. Wealth managers are targeting expats and niche audiences with new services 34
5. APPENDIX 35
5.1. Abbreviations and acronyms 35
5.2. Definitions 35
5.2.1. Affluent 35
5.2.2. Domicile 35
5.2.3. HNW 36
5.2.4. Liquid assets 36
5.2.5. Mass affluent 36
5.3. Methodology 36
5.3.1. GlobalDatas 2017 Wealth Managers Survey 36
5.3.2. GlobalDatas 2017 IFA Survey 36
5.3.3. Global Wealth Model methodology 37
5.3.4. The UK sub-model 37
5.3.5. Further sub-division of the UK wealth market 37
5.3.6. PAM UK data 37
5.4. Bibliography 37
5.5. Further reading 39
List of Tables
Table 1: Different types of UK onshore wealth management providers 8
Table 2: Competitors with the highest investment thresholds (discretionary portfolios), 2016 9
Table 3: Liquid assets held and percentage of HNW clients assets by region, 2016 10
Table 4: Top 20 UK wealth management firms by AUM (m), 2015-16 13
Table 5: Minimum investment thresholds across the top 20 competitors 15
Table 6: Fines imposed by the FCA on wealth managers 21
Table 7: Wealth manager acquisitions, November 2016-October 2017 25
Table 8: Succession Groups acquisitions, January 2016-October 2017 28
Table 9: UK wealth managers expanded their reach in 2017 29
Table 10: A number of robo-advice firms launched in the UK in 2017 31
List of Figures
Figure 1: The top 20 wealth managers by total AUM are concentrated in London and the South East 11
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