Riding high despite RDRThe UK fund sector can expect to see growth “skyrocket” in the coming years, but the balance of power could shift to smaller players, says a new report.
The
joint paper from research specialist Fundscape and the Pridham Report, which monitors fund sales and asset trends, found that “the UK’s fund management sector is flourishing, despite concerns over the impact of the Retail Distribution Review (RDR), and is now the largest domestic market in Europe, with assets of £753bn”, reports
Investment Week.
£1.5tn
The total value that assets could realistically rise to by 2019, according to the reportThe paper, called
The definitive guide to the UK fund industry 2015, “suggests a combination of low interest rates, the rising number of baby boomers, and pension freedoms that will come into force in April will help to fuel growth,” reports
Investment Week.
It quotes Bella Caridade-Ferreira, chief executive of Fundscape: “Our realistic scenario sees assets rise to £1.5tn by 2019, a compound annual growth rate of 12.8%. In the optimistic scenario, 2019 assets could be in the region of £1.8tn, or even higher.”
Investment Week article
Different approach to decisionsWealth Manager highlights the joint paper’s revelation that post-RDR, the widely expected exodus of financial advisers has not materialised. “Instead, advisers have maintained and even increased their share of fund flows."
The website quotes the report: “However, advice is consolidating, propositions are increasingly restricted and vertical integration is growing at a marked pace. In addition, advisers are outsourcing or centralising their investment decisions, which has consequences for how fund managers do business.”
Fundscape estimates that almost three-quarters of fund flows “are under some kind of distribution influence, and anticipates that a large portion of sales tend to flow into a handful of larger fund managers”, according to
Wealth Manager.
It quotes Helen Pridham, author of
The Pridham report: “There is still scope for smaller, boutique-type groups to make their mark in the UK. In recent years, high-profile fund managers have successfully set up groups and other, smaller groups have produced stand-out performance and risen up the sales league.”
Wealth Manager story
Enjoying a new sense of freedom
Meanwhile, “half of adviser businesses have already seen their bottom lines boosted by the
pensions freedoms announced last March”, reports
Professional Adviser.
It says that FundsNetwork’s inaugural
Adviser class of 2015 survey found that "53% of advisers have already felt financial benefits from the new pension freedoms, which will take effect in April.
“The majority stated they have seen an increase in the number of business enquiries on at-retirement options, 73% of which say they have seen enquiries grow by up to 25%.”
The article goes on to quote Jon Everill, head of advisory services at FundsNetwork: “We always suspected that the new pension rules would be a shot in the arm for the financial advice profession. The results from our survey are extremely encouraging and not only show that pensions are firmly back in the consumer spotlight, but also demonstrate that the increased interest around pensions is already having a positive material impact on advisory firms.”
Evrerill adds, however, that “the impact of the new rules goes further than just putting pensions back in the spotlight; they’ve actually started changing people’s perceptions and attitudes around investing”.
Professional Adviser piece
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