Wealth in the UK: Competitive Dynamics 2018

Table of Contents

1. EXECUTIVE SUMMARY 1

• 1.1. The UK wealth market continues to see M&A and digital demand 1
• 1.2. Key findings 1
• 1.3. Critical success factors 1

2. THE UK WEALTH MANAGEMENT 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 8
• 2.3. Wealth managers are concentrated in London and the South East 9
• 2.4. The leading UK wealth managers continue to expand 11
  • 2.4.1. St. James’s Place continues to expand and attract client assets 12
  • 2.4.2. Barclays focuses on investing in digital platforms 12
  • 2.4.3. Canaccord Genuity grew the most due to acquisition 12
  • 2.4.1. Kleinwort Hambros assets shrank by over 8% 12
  • 2.4.2. Discretionary investment thresholds remain stable among the top 20 13

3. REGULATORY TRENDS 15

• 3.1. MiFID II and the GDPR are now in force 15
  • 3.1.1. MiFID II came into effect in January 2018 15
  • 3.1.2. MiFID II forced firms to consolidate and find ways to reduce costs 15
  • 3.1.3. Not all firms have kept to compliance deadlines 16
  • 3.1.4. UK firms are less concerned about the GDPR than their European peers 16
• 3.2. Advice suitability remains a major focal point for the FCA 17
  • 3.2.1. The FCA’s research found that consumers are happy with advice received following FAMR 17
  • 3.2.2. The FCA has highlighted suitability failings in robo-advice 18
  • 3.2.3. The FCA is focusing on open-ended funds investing in illiquid assets 18
• 3.3. The FCA is working closely with the industry to support innovation 19
  • 3.3.1. The FCA has tested a fourth cohort of businesses in its regulatory sandbox 19
• 3.4. Poor customer protection and bad advice will result in fines 19
  • 3.4.1. The largest fine in 2018 was for failing to protect consumers against cyber attacks 19

4. COMPETITIVE TRENDS 21

• 4.1. UK competitors remain active in the M&A space 21
  • 4.1.1. Lloyds Bank and Schroders formed a joint venture to target the retail market 21
  • 4.1.2. Lack of scale led to Rathbone Brothers acquiring Speirs & Jeffrey 22
  • 4.1.3. Standard Life wants to grow its advice business by the acquisition of IFA Cumberland Place Financial Management 22
  • 4.1.4. Smaller firms are acquiring more and faster 23
  • 4.1.5. Wealth managers are also growing organically, strengthening their regional presence 23
• 4.2. New entrants remain predominantly digital players 23
  • 4.2.1. New robo-advice platforms are entering the UK wealth management space 24
• 4.3. Product and service innovation is centered around the digital space 25
  • 4.3.1. Traditional wealth managers are responding to the demand for digital advice 25
  • 4.3.2. Digital wealth management platforms are integrating with banks and payment apps 26
  • 4.3.3. Robo-advisors acknowledge the need for human interaction 26
  • 4.3.4. Socially responsible investments are growing in popularity 27

5. APPENDIX 28

• 5.1. Abbreviations and acronyms 28
• 5.2. Definitions 28
  • 5.2.1. Affluent 28
  • 5.2.2. HNW 28
  • 5.2.3. Liquid assets 29
  • 5.2.4. Mass affluent 29
• 5.3. Methodology 29
  • 5.3.1. Global Data’s 2018 Global Wealth Managers Survey 29
  • 5.3.2. GlobalData’s 2017 Wealth Managers Survey 29
  • 5.3.3. GlobalData’s UK Investor Survey 29
  • 5.3.1. GlobalData’s 2018 IFA Survey 30
  • 5.3.1. Global Wealth Model methodology 30
  • 5.3.2. The UK sub-model 30
  • 5.3.3. Further sub-division of the UK wealth market 30
  • 5.3.4. PAM UK data 30