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UK Wealthy Investors 2018: Consumer Research Report

  • ID: 4751481
  • Report
  • Region: United Kingdom, Great Britain
  • 90 Pages
  • IRN Research
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FEATURED COMPANIES

  • Barclays
  • Intrinsic
  • Prudential
  • St James’s Place
  • MORE

The aim of the Wealthy Investors Consumer Research report is to study UK consumers with investible wealth of £75,000 and above. It considers how these individuals invest their money and obtain and judge the advice they receive when they make financial investments. Wealth in this context is taken to include money currently invested in risky investments products, money held as cash and money held in defined contribution pensions which can be accessed by the pension holder (i.e. the pension holder is aged 55+). The report considers what types of financial products wealthy investors hold, how much they understand about the investment process, their overall approaches to investing, the type of financial advice they want and how they access advice. It also considers how wealthy investor investment behaviour has been influenced by online developments such as fund platforms.

Just under one-third of Investors can be called Wealthy Investors, having £75,000 or more spread across risky investment products, cash and/or defined contribution (DC) pensions which can be accessed by their owners. Relative to Investors with less wealth, Wealthy Investors are more likely to be male, mature and affluent (from professional occupations). Just over one-in-ten Wealthy Investors can be classified as Millionaires. Wealthy Investors like to do it for themselves

More than half of Wealthy Investors have the confidence to handle their investments without professional help. If they do seek professional help it is primarily used in conjunction with (and not as a substitute for) their own DIY investing actions. Wealthy Investors who take professional advice, show a strong preference for using Independent Financial Advisors (IFA), with IFAs especially popular among Investors who lack confidence in their investing abilities and those who hand over all their investing to professional advisors. Despite the preference for going it alone, the Wealthy Investors research identifies ample opportunities for financial advisors to expand into this market.

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FEATURED COMPANIES

  • Barclays
  • Intrinsic
  • Prudential
  • St James’s Place
  • MORE

1. Executive Summary

  • Around one-third of Investors fall into the Wealthy Category
  • It’s been a good year for the wealthy
  • Wealthy Investors are often confident at handling their investment alone
  • Wealthy investors prefer balanced returns over the medium to long term
  • And they adopt a simple selection heuristic
  • Wealthy Investors balance trust and quality when selecting an advisor
  • Wealthy Investors show a preference for IFAs and like the advice they have received.
  • Prudential, Barclays, Intrinsic and St James’s Place are the most widely used advisory firms
  • Future Opportunities
  • Advisors need to embrace online technologies

2. Introduction

  • Definitions
  • Abbreviations

3. An Introduction to Wealthy Investors

  • Key findings
  • Almost one-third of Investors fall into the “wealthy” group
  • Acceptance of risk grows with wealth
  • But there are limits to the risks that will be taken
  • Equities and SIPPs the most popular risky investment held
  • Age, gender and income the great discriminators
  • Almost Eight-in-ten Investors have an ISA
  • Stocks and share the main component of Investment ISAs
  • And they form a significant component of Investment funds/pension products
  • Wealthy fund holders like their fund actively managed
  • Cash will be king over the coming year
  • The wealthiest Investors the most likely to invest more
  • Wealthy Investors had a good year

4. The Investment Mindset

  • Key findings
  • Wealthy Investors are confident in their investing abilities
  • Two categories of Wealthy Investor
  • Confidence and knowledge helps breeds wealth
  • Like all Investors, Wealthy Investors have a strong independent streak
  • Investment confidence drives the approach taken to investing
  • Four-in-ten Wealthy Investors are Confident DIYers
  • Being confident or taking advice tends to drive asset ownership

5. How Retail Investors Judge What to Buy

  • Key findings
  • Wealthy Investors like to accumulate monthly
  • Wealthy Investors take a balanced view of their returns
  • Wealthy Investors want medium-to-long term investments
  • Investment judgements change according to the level of wealth owned
  • And according to the type of Investor
  • Investors focus on easy to understand product features
  • The £300,000 wealth divide
  • The bigger the risks taken and the less confidence you have the more you deliberate about your choices

6. Selecting a Financial Advisor

  • Key findings
  • One quarter of Wealthy Investors wouldn't know where to start
  • Wealthiest Investors with diverse portfolios have the easiest task
  • Trust factors the stronger drivers of advisor selection
  • Investors Lacking confidence need assurance on trust
  • Wealthier Investors are more demanding and especially want more assurance on quality
  • What type of advice do Investors want and do you really want advice?
  • Confident Advised Investors have the greatest understanding

7. How do Wealthy Investors Use of Financial Advisors?

  • Key Findings
  • IFAs are the most likely type of advisor used
  • Over six-in-ten of the Advised have met with advisor over 2017/18
  • IFAs, again are the main advisors last consulted
  • Advisors are used primarily on an advisory basis
  • Those receiving advice often let advisors execute their investment actions
  • Asset selection is the prime reason why advisors are used
  • Wealthy clients are satisfied with the service they receive
  • Most Advised Investors see a Keyfacts document which aids satisfaction
  • Flat fee and on-going fees used in equal amounts
  • Prudential, Barclays and Intrinsic the most widely used advisory firms
  • Prudential leads among current Advised Wealthy Investors

8. The Future of Advice: Advisors Vs Technology

  • Key Findings
  • Even Wealthy Investors face an advisory gap
  • Under Advised more likely to be female Investors with lower levels of wealth and income
  • Even Confident DIYers could benefit from guidance services
  • Opportunities exist because advisors are considered as the best source of information
  • Cost, complexity and self-belief the three main barriers to be overcome
  • Advisory firms need to exploit online tools or potentially lose Investors
  • Fund platforms are a key threat but also an opportunity
  • The Online challenge/opportunity may be even larger
  • Use of online services and sites is growing
  • What is the potential for a Robo-advice service?

9. Appendix

List of Figures
Figure 1 The breakdown of Wealthy Investors by level of wealth
Figure 2 The breakdown of consumers based on their investment holdings, 2018
Figure 3 The main motives for investing
Figure 4 The ownership of investment, pension and cash assets by type of Wealthy Investor
Figure 5 The financial and demographic profile of consumer wealth groups
Figure 6 The average wealth held by Wealthy Investors by gender, age and social grade
Figure 7 ISA holdings by Wealthy Investors
Figure 8 The assets held within investment ISAs
Figure 9 The assets held in collective investment and pension products
Figure 10 The types of investment funds held
Figure 11 Wealthy Investor investment intentions over the coming year
Figure 12 The net %* of consumers planning to invest more next year by type of consumer and product
Figure 13 Wealthy Investor satisfaction with the growth of their wealth over the past year
Figure 14 The financial returns earned in the past year by Investor satisfaction
Figure 15 Confidence buying a financial product without professional help
Figure 16 Investor confidence, risk taking and number of assets classes owned by level of wealth
Figure 17 Willingness to take risks, the number of assets classes owned and wealth by confidence
Figure 18 How Wealthy Investors approach investing by their confidence in the own investing abilities
Figure 19 The breakdown of Wealthy Investors by abilities and advice alignment
Figure 20 Profile of Wealthy Investors based on their investing abilities and use of professional advice
Figure 21 A picture of the investment preferences of Wealthy Investors
Figure 22 A correspondence analysis of investment judgement by wealth group
Figure 23 Wealthy Investor investment preferences by confidence and use of advisors
Figure 24 The most important factors when selecting an investment
Figure 25 The factors used to determine an investment decision by wealth group
Figure 26 Average number of factors considered before making an investment
Figure 27 The percentage of Wealthy Investors who know* where to start looking for a financial advisor
Figure 28 What questions are important to ask of a financial advisor?
Figure 29 The average number of trust and advice questions asked of financial advisors by Investor Mindset
Figure 30 The average number of trust and advice questions asked of financial advisors by Investor wealth
Figure 31 Investor understanding on the advice on offer
Figure 32 Investor understanding of the difference between advice and guidance
Figure 33 The most favoured types of professional advisor used
Figure 34 The last time a professional financial advisor was consulted
Figure 35 Type of advisor met and type of Investor by timing of the last advisor meeting
Figure 36 The relationship with the firm they consulted with at the last meeting
Figure 37 How Advised Investors wish to execute trades/investment changes
Figure 38 The main areas of discussion during the last meeting with an advisor
Figure 39 How satisfied were Advised Investors with the last meeting they had with a financial advisor
Figure 40 The major financial advisory firms by public awareness and use
Figure 41 The percentage of Wealthy Investors aware of a brand who have been converted into customers
Figure 42 The use of financial advisory firms by Advised Wealthy Investors
Figure 43 Profile of Under-Advised Wealthy Investors
Figure 44 The investment profile of Under-Advised Wealthy Investors
Figure 45 The topics on which advice, guidance or support is needed by advice provision
Figure 46 Indicators of the degree to which advice and support is needed
Figure 47 The best source of advice, guidance and support to recommend the course of action
Figure 48 The main barriers to using a financial advisor
Figure 49 The percentage of Wealthy Investors personally using fund platforms
Figure 50 The percentage of owners of specific risky investments that use fund platforms
Figure 51 The percentage of Wealthy Investors using the listed fund/investment platforms
Figure 52 Use of individual fund platforms/investor services by advice taken
Figure 53 The change in use of online investment platforms and services
Figure 54 The willingness of Investors to use Robo-advisors
Figure 55 The willingness of Investors to use Robo-advisors by type of Investor
Figure 56 Investment preferences by wealth

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  • Barclays
  • Intrinsic
  • Prudential
  • St James’s Place
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