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Financial Services Industry on Consumers and Financial Advice Market in UK - April 2014

MarketResearchReports.Biz announces addition of new report “Consumers And Financial Advice - UK - April 2014” to its database

 

Albany, NY -- (ReleaseWire) -- 04/23/2014 -- Market Research Report: Consumers And Financial Advice Industry In UK April 2014 - Global Industry Analysis, Size, Share, Growth, Trends and Forecast

The advice gap presents an opportunity for the financial advice industry. Firms that are able to innovate and offer low cost solutions will prosper in future, while those who do not address this part of the market will forfeit share to online competitors.

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Table of Content

Introduction

Note on definitions
Note on consumer research
Abbreviations

Executive Summary

The financial advice market
Numbers of financial advisers continue to increase post-RDR

Figure 1: Number of advisers, by sub-type, December 2012, July 2013 and January 2014
The RDR – More phases are implemented
Economic and demographic context
A lack of disposable income makes it difficult for consumers to save
The consumer
Consumers use banks for advice more regularly than financial advisers

Figure 2: Types of financial advice used, January 2014
Referrals and recommendations are still a popular way for consumers to find an adviser

Figure 3: Methods for finding financial advice, January 2014
Face-to-face remains the most popular way to receive financial advice

Figure 4: Accessing financial advice, January 2014
The cost of advice is still a concern for consumers

Figure 5: Attitudes towards financial advice, January 2014
The majority of consumers would prefer ad hoc advice
More consumers would prefer to make their own decisions rather than rely on professional advice

Figure 6: Attitudes towards managing finances, January 2014
What we think

Issues and Insights

Online tools can make financial advice affordable for younger consumers
The facts
The implications
Flexibility is the key to attracting wealthier consumers
The facts
The implications
Banks and building societies still have the perfect platform for offering mass-market advice
The facts
The implications
Advice through money advice or employers can give consumers greater confidence
The facts
The implications

Trend Application

Keep it local
DIY administration for cheaper financial advice
Mintel Futures: Generation Next

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Regulatory Context

Key points
The RDR – More phases are implemented
Capital adequacy rules to be delayed until 2017
First thematic review on how firms are implementing the RDR
Second thematic review on delivering independent advice
Non-advised and simplified advice
RDR has not reduced the financial adviser population

Figure 7: Number of advisers, by sub-type, December 2012, July 2013 and January 2014
Mortgages
MMR comes into force banning most non-advised sales
The 2014 Budget proposes to ‘guarantee guidance’ for consumers at retirement
European regulation
MiFID II could challenge the rules of the RDR
rules on PRIPs could also conflict with the RDR

Economic Context

Key points
A lack of disposable income makes it difficult for consumers to save

Figure 8: Increases in the cost of living and the growth in average wages, January 2008-February 2014
Economic improvement begins to pull down the savings ratio

Figure 9: Quarterly change in UK GDP and Household savings ratio, Q1 2004-Q4 2013
Low interest rates continue to undermine appeal of cash savings

Figure 10: Official bank base rate and three-month LIBOR, January 2007-February 2014
FTSE continued to edge higher in 2013

Figure 11: FTSE 100 and FTSE All-share – Daily index movements, January 2008-March 2014

Consumer Sentiment

Key points
Consumer confidence increased sharply in 2013

Figure 12: UK consumer confidence index, January 1989-December 2013
Consumers’ finances are slowly improving…

Figure 13: Trends in consumer financial situation, June 2009-January 2014
yet 29% feel that their financial position is worse than last year

Figure 14: Trend in financial situation compared to a year ago, July 2011-February 2014
Consumers are more optimistic about the future

Figure 15: Trend in consumer sentiment for the coming year, June 2009-December 2013

Value of Savings and Investments

Key points
Overall, consumers have low levels of savings and investments

Figure 16: Value of savings and investments, January 2014
Financial advisers target affluent consumers

Figure 17: Wealth of advised clients, August 2013
Older consumers are more likely to be seeking financial advice

Figure 18: Value of savings and investments, by age, January 2014

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Expected Demand for Financial Advice by Product

Key points
The majority of consumers expect to receive advice on a financial product in the future

Figure 19: Expected demand for financial advice by product, January 2014
Younger consumers are more likely to expect to receive advice in the future

Figure 20: Expected demand for financial advice by product, by age, January 2014
Over 55s underestimate their need for pension advice
Wealthier consumers are more likely expect to receive advice on savings and investments

Figure 21: Expected demand for financial advice by product, by value of savings and investments, January 2014
There is potential for cross-selling of services across the advice industry

Figure 22: Expected demand for financial advice by product, by expected demand for financial advice by product, January 2014

Types of Advice Used

Key points
Bank and building societies top list of most used professional source of advice

Figure 23: Types of advice used, January 2014
Financial advisers are more likely to be used by wealthier consumers
Friends and family hold sway with younger consumers
Online channels of advice are widely used to inform financial decisions
People want to learn from the experiences of others
Money Advice Service is yet to attract widespread use as a channel of advice
Employers also remain a niche source of advice
Wealthier consumers are more likely to have used a financial adviser

Figure 24: Value of savings and investments, by types of advice used, January 2014

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