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Consumer Investors 2018: Market Trends Report

  • ID: 4733486
  • Report
  • 54 Pages
  • IRN Research
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At the end of the Second Quarter of 2018, UK Households Collectively Held Almost £7 Trillion in Financial Assets, With Their Accumulated Wealth Having Risen by 30% Over 2012-18.

FEATURED COMPANIES

  • Aegon
  • Aviva plc
  • Fidelity International
  • Investec Group
  • Legal & General
  • M & G Prudential
  • MORE

Almost eight-in-ten consumers – 37.1 million - own any type of investment product (including holding cash) with just over half owning a risky investment product (i.e. a product other than cash). Ownership of investments, especially risky investments, is skewed towards wealthy individuals.

In 2017, over 3 million investment products were sold, down on the figure for 2016. The annual market for investment products has hovered around the 3 million mark over 2013 to 2018. Between 2012 to 2018, the main growth sectors of the market have been primarily pension-related, i.e. income drawdown, SIPP, group personal pension, private personal pension and other personal pensions

At the end of the second quarter of 2018, UK households collectively held almost £7 trillion in financial assets, with their accumulated wealth having risen by 30% over 2012-18. The net annual amount invested in financial assets had stayed stable at around £90 billion over 2013 to 2016. In 2017, however, the amounts invested declined sharply compared with 2016, and looks set to remain at the subdued, 2017 level in 2018

The investment market is being re-shaped by technology and changing demands.

Key changes include

  • The development of investment/fund platforms and investment apps
  • Retail Distribution Review
  • Auto-enrolment
  • Pension Freedoms
  • Increased demand for yield
  • Increased demand for outcome-oriented strategies.
  • Unwinding of buy-to-let property investment

The central focus of this report is the types of investment products consumer own, how much they are investing and the environmental framework in which investments are made. It looks at the size of the market, recent trends and provides forecasts for the future. A special supplement is included which looks at the market size for Wealthy Investors, defined as investors with £75,000 or more invested in retail investment products, cash or defined contribution pensions which can be accessed by the pension holder.

Note: Product cover images may vary from those shown
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FEATURED COMPANIES

  • Aegon
  • Aviva plc
  • Fidelity International
  • Investec Group
  • Legal & General
  • M & G Prudential
  • MORE

Executive Summary

  • Almost 40,000 businesses
  • A market skewed towards the wealthy
  • Which results in advisors being a key channel for investment product sales
  • An investment market being re-shaped by technology and changing demands
  • Over 3 million investment products sold in 2018
  • Consumers have almost £7 trillion invested
  • Consumer invest £64 billion net in financial assets in 2017
  • A future clouded in uncertainty

Introduction

  • Definition
  • Abbreviations

Market Structure

Market Developments and Drivers

  • The retail investment market is re-shaped by legislation
  • The FCA tackles the investment management market
  • Most consumers own investments but only around half take risks
  • Mature, wealthy males the main investment risk takers
  • Too many consumers take decisions in the dark, so often make mistakes
  • The rise of app-based investing and online investment platforms
  • Consumer investments re-shaped by demand pressures
  • Investment sales are primarily channelled via advisors
  • RDR, AE and pension freedoms change the distribution landscape

The Key Players

  • The largest insurance companies offering investment products/services
  • Largest investment managers
  • Largest closed-end fund managers
  • Profiles of key players
  • Aegon
  • Aviva plc
  • Baillie Gifford Group of companies
  • Brewin Dolphin Securities (BDS)
  • Blackrock Investment Management (UK) Limited
  • Fidelity International
  • Investec Group
  • Legal & General
  • Link Fund Solutions Limited
  • M & G Prudential
  • Quilter plc/Old Mutual Wealth
  • Royal London Mutual Insurance Society Ltd
  • Scottish Widows/Lloyds Banking Group
  • Schroder Unit Trusts Limited
  • Standard Life Aberdeen plc
  • Threadneedle Investment Services Ltd

Market Size and Trends

  • 3.2 million investment products sold in 2018
  • Pension products the main market drivers
  • Consumers have £6.6 trillion invested
  • Consumers invest £64 billion net in financial assets in 2017
  • Pensions the prime focus for consumer investing activity

The Future

  • The Brexit unknown
  • Forecasts

Focus on Wealthy Investors

  • One-third of investors are wealthy
  • Wealthy investors hold more than 90% of consumer wealth

Associations

List of Figures
Figure 1 The number of businesses engaged in consumer investing, 2017
Figure 2 The number of authorised insurers
Figure 3 The percentage of consumers who are Investors and Risk Takers*
Figure 4 Volume breakdown of investment product sales (%) by channel and product, year ending June 2018
Figure 5 The source of gross retail sales of investment funds (% of value), 2015-2018
Figure 6 The changing distribution structure of investment products*, 2007-2017
Figure 7 The percentage of investment product purchases made after a single, lump sum payment, 2017
Figure 8 Examples of the major insurance companies in the UK offering long-term savings
Figure 9 The 30 largest open-ended fund investment managers by assets under management, July 2018
Figure 10 The largest closed-end fund management companies, November 2018
Figure 11 The number of investment products sold 2007-2018
Figure 12 The composition of, and trends, in the investment products market 2012-2018
Figure 13 Household financial wealth, end of period, 2012-2018 (Q2)
Figure 14 Household net acquisition of financial assets, 2012-2018
Figure 15 Household saving and financial asset acquisition
Figure 16 Household net acquisition of financial assets by asset type (purchases less sales), 2012-18
Figure 17 A comparison of the net acquisition of financial assets and changes in wealth*, Jan-June 2018
Figure 18 Forecasts of total consumer financial wealth and net asset acquisition
Figure 19 The number of wealthy investors
Figure 20 The distribution of wealth by wealth owned

Note: Product cover images may vary from those shown
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  • Aegon
  • Aviva plc
  • Baillie Gifford Group of companies
  • Blackrock Investment Management (UK) Limited
  • Brewin Dolphin Securities (BDS)
  • Fidelity International
  • Investec Group
  • Legal & General
  • Link Fund Solutions Limited
  • M & G Prudential
  • Quilter plc/Old Mutual Wealth
  • Royal London Mutual Insurance Society Ltd
  • Schroder Unit Trusts Limited
  • Scottish Widows/Lloyds Banking Group
  • Standard Life Aberdeen plc
  • Threadneedle Investment Services Ltd
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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