High Net Worth Financial Advisors 2006

[Laura Wood]

I enclose details of our latest UK High Net Worth Market Report.   
   
IFAs that focus on the HNW population are a key channel for distributing to wealthy customers.  This report utilizes the findings of our IFA surveys of 75 IFAs to look in detail at the attitudes and approaches of those that focus on a wealthy customer base.    
   
Scope of this title:   

- The report draws on data from surveys of over 400 IFAs throughout 2005 and 2006, including the opinions of 75 high net worth IFAs    

- In-depth analysis of the potential impact of A-Day pensions legislation upon the high net worth financial advisory community    

- Identification of key issues crucial to the high net worth financial advisory community and recommendations for future development    
   
Highlights of this title:   

Nearly a third of HNW IFAs conduct between 31-50% of their business in areas of pensions & investments making them the most prominent HNW IFA issues    
   
As a result of A-Day legislation, nearly half of HNW IFAs have enacted a formal reappraisal of all their clients retirement provisions    
   
High net worth IFAs save the most time by ensuring there is good communication between provider and advisor    
   
Reasons to order your copy:   

- Gain insight into the attitudes and views of the high net worth advisor market    

- Discover which providers have been most helpful in guiding high net worth advisors through pensions reform    

- Understand how to effectively target the UK high net worth IFA market and how to focus your business proposition   
   
For a complete index of this report click on:   
http://www.researchandmarkets.com/product/644491/high_net_worth_financial_advisors_2006   
   
Report Index:   
   
Introduction 4   
The UK HNW IFA Market 4   
A-Day and Its effects on the High Net Worth IFA market 5   
What do IFAs mean by service? 5   
Action points 6   
   
Chapter 1.    
   
The uk high net worth ifa market   
Introduction 18   
Key findings 18   
Sole traders remain the largest segment of the high net worth IFA market 19   
Nearly a third of HNW IFAs conduct between 31-50% of their business in areas of pensions & investments making them the most prominent HNW IFA issues 20   
On the other hand, nearly half of HNW IFAs conduct between 0-10% of their business in areas such as mortgages, financial planning & protection products 21   
HNW IFAs are conservative about the future growth prospects of investment products 22   
The large majority of high net worth IFAs believe demand for investment products will either stay the same or increase by a minimal amount over the coming six months 22   
Skandia and Standard Life are the most popular insurers among high net worth IFAs, while Abbey & Aviva are the least popular 23   
Invesco Perpetual, Fidelity & Jupiter are the most popular mutual fund providers 24   
Nearly two thirds of high net worth IFAs believe that the market will either see limited growth or stay the same within the next 6 months 25   
Data 27   
   
Chapter 2.    
   
A-day and its effects on the high net worth ifa market   
Introduction 31   
Key findings 31   
The emergence of A-Day has had a pronounced impact on IFAs and clients alike 32   
A-Day has been well received by the IFA community with over two thirds of IFAs affirming the positive impact of the legislation on their business 32   
High net worth IFAs believe that Skandia & Standard Life were the most helpful providers in guiding them through legislation in the run up to A-Day 33   
As a result of A-Day legislation, nearly half of HNW IFAs have enacted a formal reappraisal of all their clients retirement provisions 35   
Just under half of high net worth IFAs surveyed have noticed some growth in client awareness of pensions & related issues since A-Day 36   
SIPP investments offer significant potential for future growth in the pensions industry 38   
Increased client awareness has not translated into significant levels of new SIPP business for just under two thirds of IFAs surveyed 38   
However, approximately one third of IFAs have seen a substantial increase in new SIPP business since A-Day and they believe greater flexibility has been the main reason for this growth 39   
Approximately a third of IFAs currently offer group SIPP products with only a minimal number planning to do so in the future 40   
Two thirds of IFAs perceive SIPP products as a potential growth area for the future 42   
The semi-compulsory NPSS pension scheme is an attempt to encourage investors to save for their retirement 43   
There is still no definitive decision as to how the NPSS will be run, with opinion split as to whether the scheme will be operated by the government or the insurance industry 43   
Anxiety over the schemes implications are felt by many industry experts but this is not the case for over two thirds of HNW IFAs who believe the scheme will have no effect on their business 44   
The lack of perceived impact is due to the role of the NPSS as a cost-reducing initiative that targets lower income & mass market customers 45   
IFAs & Investment Products 46   
The primary vehicle suggested by HNW IFAs for clients to save for their retirement is an ISA investment 46   
Three quarters of HNW IFAs surveyed believe that ISAs will also see some level of growth in the future 48   
   
Chapter 3.    
   
What do high net worth ifas mean by service?   
Introduction 55   
Key findings 55   
Over 90% of HNW IFAs believe that service is important in influencing the choice of provider 56   
Skandia & Standard Life are perceived to offer the best "all-round" service 56   
Just over two thirds of HNW IFAs give between 0-50% of their business to the provider with the best overall service 57   
Aviva and Legal & General are cited as providers with the worst "all-round" service 58   
Unsurprisingly, nearly 95% of HNW IFAs give the lowest 0-25% of their business to the provider with the worst overall service 59   
HNW IFAs believe that quality of communication and efficiency of processing claims & queries are the most important aspects of service when choosing a provider 61   
Skandia & Standard Life are ranked as the best providers in terms of quality of communication and efficiency of processing claims & queries 61   
AXA and Abbey National were the least popular in terms of communication and processing claims & queries 61   
In terms of efficiency of commission payments, Skandia & Standard Life are also the most popular, while AXA and Abbey National are once more the least popular 63   
IFAs save the most time by ensuring there is good communication between provider and advisor 64   
Improving the quality of help lines is the best that providers can do to improve levels of communication between themselves and IFAs 66   
Online communication is IFAs preferred method of communication with providers 67   
IFAs are dissatisfied at the level of service they receive from providers 69   
Nearly three quarters of HNW IFAs believe the service they receive from providers has deteriorated over the last 5 years 69   
However, growth in online applications & processing and management of policies has improved the service that HNW IFAs have received from providers 70   
Most HNW IFAs are in agreement that technology has improved service, simplified dealings with providers or impacted the investment side of IFAs business 72   
Policy processing is most efficient when dealing with life insurance bonds 73   
Data 75   
   
Chapter 4.    
   
Action points   
Introduction 82   
Key findings 82   
Despite the ever increasing importance of good service, HNW IFAs choice of product provider remains largely driven by fund performance 83   
Providers need to keep IFAs well informed about their plans and product launches, as well as taking steps to learn more about the profile of the HNW client base 83   
Online platforms and integrating technology are important for the future, but providers must do their best to ease HNW IFA understanding of internet propositions 84   
SIPP products are a potential growth area for the future 85   
Retirement planning is also key in the HNW space 85   
   
APPENDIX    
Definitions 87   
Independent Financial Advisers (IFAs) 87   
FSA 87   
Multi-tied agents 87   
SIPPs (Self Invested Personal Pensions) 88   
Stakeholder Pensions 88   
Tied agents 88   
Further reading 88   
Savings and Investments SPP 88   
Interactive Databases 88   
Reports 88   
Briefs 89   
Life and Pensions SPP 89   
Interactive Databases 89   
Reports and Briefs 89   
Financial Advice Market SPP 90   
SPP writing team    

List of Tables   
Table 1: Classification of HNW IFAs from all surveys 27   
Table 2: Percentage of HNW IFA business conduct in a range of investment areas 27   
Table 3: HNW IFA opinion of how sales of investment products will change over the next 6 months 28   
Table 4: HNW IFA attitude towards insurers, segmented by positive, neutral and negative categories 29   
Table 5: HNW IFA attitude towards mutual fund providers, segmented by positive, neutral and negative categories 30   
Table 6: HNW IFA attitude towards growth of the HNW IFA market over the next 6 months 30   
Table 7: Impact of A-Day legislation on HNW IFA business 49   
Table 8: HNW IFAs perception of the most helpful providers in helping them deal with the run up to A-Day 50   
Table 9: Measures put in place by HNW IFAs as a result of A-Day legislation 50   
Table 10: HNW IFA perception of growth in awareness of pensions and related issues among their clients 51   
Table 11: HNW IFA perception as to changes in the volume of their SIPP business since A-Day 51   
Table 12: HNW IFA perception as to the main driver behind growth in the SIPP market 52   
Table 13: Number of HNW offering Group SIPP products 52   
Table 14: HNW IFA perception on Group SIPPs and their potential for growth 53   
Table 15: HNW IFA opinion of the potential impact of the NPSS on their business 53   
Table 16: HNW IFA view as to whether the NPSS will be run by the government or insurance industry 53   
Table 17: Top ranked tax efficient retirement products in the eyes of HNW IFAs (ranked by 1-6) 54   
Table 18: Growth of prospective retirement planning products in the eyes of HNW IFAs 54   
Table 19: HNW IFA ranking of providers offering the best all round service 75   
Table 20: Percentage of business given by HNW IFAs to providers with the best overall service 75   
Table 21: Worst ranked providers in terms of all round service in the eyes of HNW IFAs 76   
Table 22: Percentage of business given by HNW IFAs to providers with the worst overall service 76   
Table 23: Relative importance of certain aspects of service in the eyes of HNW IFAs. 77   
Table 24: Best providers in terms of quality of communication, ranked in order of importance by HNW IFAs 77   
Table 25: Best providers in terms of efficiency of processing claims & queries, ranked in order of importance by HNW IFAs 78   
Table 26: Best providers in terms of efficiency of commission payments, ranked in order of importance by HNW IFAs 78   
Table 27: Time saved by HNW IFAs by receiving good service from providers in a variety of areas 79   
Table 28: HNW IFA ranking of factors that providers should take into account to improve levels of communication 79   
Table 29: Ranking of HNW IFAs preferred method of communication with providers 80   
Table 30: HNW IFA opinion as to whether the service they receive from providers has improved in the last 5 years 80   
Table 31: HNW IFA opnion as to whether general online developments have helped improve the service they receive from providers 80   
Table 32: HNW IFAs agreement/disagreements with a variety of statements regarding the integration of technology in the advisory industry 81   
Table 33: HNW IFA ranking of the efficiency of policy processing in a variety of areas    

List of Figures   
Figure 1: Sole traders make up just under a third of HNW IFAs surveyed 20   
Figure 2: Most HNW IFA business is conducted in the areas of investments and pensions 21   
Figure 3: The vast majority of HNW IFAs believe that demand for investment products is likely to either stay the same or increase by a minimal amount over the next six months 23   
Figure 4: Skandia & Standard Life are the most popular insurers in the eyes of HNW IFAs, while Abbey & Aviva are the least popular 24   
Figure 5: Invesco Perpetual & Fidelity are the most popular mutual fund providers according to HNW IFAs, while HSBC & Henderson Global Investors are the least popular 25   
Figure 6: Most HNW IFAs believe that the IFA market will either remain static or experience minimal growth over the next 6 months 26   
Figure 7: None of the HNW IFAs surveyed have reported a negative impact on their business arising from A-Day legislation 33   
Figure 8: HNW IFAs believe that Standard Life & Skandia were the most helpful providers in guiding them through A-Day 35   
Figure 9: Nearly half of all HNW IFAs surveyed have carried out a formal reappraisal of all their clients retirement provisions as a result of A-Day legislation 36   
Figure 10: Three quarters of HNW IFAs have noticed growth in awareness of pensions and related issues among their clients since A-Day 37   
Figure 11: Nearly sixty percent of HNW IFAs have seen their levels of SIPP business unchanged by A-Day developments 39   
Figure 12: Just over a third of HNW IFAs who have seen an increase in SIPP business believe it is due to enhanced flexibility 40   
Figure 13: More than half of HNW IFAs do not offer group SIPP products and only a minimal number plan to do so in the future 42   
Figure 14: More than two thirds of HNW IFAs believe that the SIPPs market has potential for future growth 43   
Figure 15: Just over two thirds of HNW IFAs believe that the proposed introduction of NPSS will have no impact on their business whatsoever 45   
Figure 16: Nearly 90% of HNW IFAs suggest clients use ISAs above any other investment to save for their retirement 47   
Figure 17: Three quarters of HNW IFAs believe that ISAs will experience some level of future growth in terms of being utilized as a retirement planning vehicle 48   
Figure 18: Skandia & Standard Life received the highest number of responses under the "most important" category in terms of all-round service 57   
Figure 19: Just under half of HNW IFAs surveyed, give between 0-25% of their total business to providers with the best overall service 58   
Figure 20: Aviva and Legal & General are cited as the providers with the worst all-round service 59   
Figure 21: The overwhelming majority of HNW IFAs give between 0-25% of their business to the provider with the worst overall service 60   
Figure 22: Skandia & Standard Life are ranked as the most important providers in terms of quality of communication according to HNW IFAs 62   
Figure 23: Standard Life & Skandia are ranked as the most successful providers for the efficiency of processing claims and queries 63   
Figure 24: Skandia & Standard Life were ranked as the best providers in terms of efficiency of commission payments by HNW IFAs 64   
Figure 25: HNW IFAs save the most time when there is good communication between provider and advisor 66   
Figure 26: HNW IFAs believe the best providers can do to ensure better communication between the two parties is to improve the quality of provider helplines 67   
Figure 27: HNW IFAs prefer to communicate with providers electronically 68   
Figure 28: The vast majority of HNW IFAs believe the service they receive from providers has deteriorated over the last five years 70   
Figure 29: Three fifths of HNW IFAs believe growth in online applications, processing & management of policies has improved the service they receive from providers 71   
Figure 30: Most HNW IFAs agree that technology has generally improved service and made it easier to deal with providers 73   
Figure 31: Most HNW IFAs believe policy processing is most efficient with life insurance bonds 74   
   
Pricing:   
Electronic : EUR 2991   
   
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Thank you for your consideration.   
Best Regards,   
   
Laura Wood
   
Senior Manager
   
Research and Markets Ltd
   
laura.wood na researchandmarkets.com   
   
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