Citylogue
Our UK Consulting team is responsible for our new UK & EMEA focused Citylogue – a must-read for those within the wealth industry. Citylogue takes a deeper look at contemporary issues in wealth management, asset management, and protection across the UK, Europe, and Asia.
Subscribe to Citylogue and stay current with our latest insights.
ESG: what asset owners want from ESG – and their asset managers
ESG is going mainstream, but what asset owners are seeking to achieve and the role of their asset managers is still poorly understood. NMG’s new Global ESG Study provides answers to the big ESG questions. Based on interviews with over 200 asset owners and 800 responses from US plan sponsors and advisers implementing ESG, […]
The workplace consolidation threat to individual pension providers
Consumer decisions about pension consolidation are increasingly important to the fortunes of pension providers. Nearly half of workplace pension members now prefer to consolidate to a workplace pension, instead of the individual products they would have typically done previously – a growing risk to individual pension providers. DC workplace pensions are highly intermediated. Most […]
Are NEST’s members becoming more attractive for competitors?
NEST was established in 2010 to support pensions auto-enrolment, a public sector provider which would ensure every employer could access a workplace pension scheme for their employees. However, for a scheme seen by industry as a backstop, it now has many members with around average or better incomes, and material account balances. The second […]
DC workplace pensions: rising flows and more switching will tempt entrants
The minimum contributions ramp-up is helping drive growth in DC workplace pension flows. In parallel, the switching “secondary market”, long predicted but slow to emerge, is also picking up steam. Against a slow growth UK wealth market, these dynamics make workplace pensions appear tempting for entrants. But with profitability elusive, is this actually a […]
Four realistic ideas for the reality of pensions disengagement
Member disengagement in workplace pensions is well documented; with similar issues evident in individual pensions, providers need to be smart but realistic in their communications strategy. Despite the recent focus on engagement issues within workplace DC pensions, it is worth remembering that individual pensions (personal pensions and SIPPs) still account for >50% of DC […]
Sizing the DB transfer market
The DB transfer market has been a key new source of retail flows in recent years but is under considerable regulatory pressure. Although run rates are well off their peak, underlying dynamics mean that DB transfers should continue to play an important role in new flows. What should insights and strategy teams assume for […]
UK wealth industry value chain is gradually contracting
Total fees paid by consumers have appeared stuck at ~200bps despite many changes in the industry in recent years. However NMG data shows that prices in all key components of the value chain are falling. The UK wealth industry value chain has been resilient over the past decade, despite many changes including rapid growth […]
Peak passive: 3 reasons why passive share may top out
The upwards march of passive market share seems unstoppable. But there are reasons to think why, in some institutional segments at least, market-cap passive share may peak soon. 2018 was a tough year for active asset managers. Market volatility hurt profitability while the spectre of customer migration from active management to passive had a […]
Advice fees but no service: a question of criminal law
The threat to vertical integration has receded but financial advice is under attack. Ongoing fees underwrite the economics of advice, but if services are not delivered, a crime may have been committed. The final report of Australia’s Financial Services Royal Commission was released on Monday; on Tuesday the share prices of banks and wealth […]
Adviser remuneration reforms and vertical integration bans: a sign of things to come?
By investigating practices implicit in vertically integrated business models, the Australian Royal Commission report is likely to ask serious questions of the wealth management industry: UK wealth managers need to take note. In early February a seminal report into misconduct in the wealth management industry is expected to be released which is likely to […]
DB Pensions and why DB transfer flows will continue
Defined benefit (DB) pensions loom large over the UK wealth landscape, with huge assets and even bigger liabilities. Shortfalls (actual or potential) between assets and liabilities, and the choices of funds in managing them, make DB particularly challenging in terms of asset management, while DB transfers have become an important part of wealth industry […]
Future of ISAs – a tax shelter for high income earners?
In our last edition we looked at the narrowing of the ISA market, in particular the divergence of the Cash and Stocks & Shares markets. Cash ISAs sales have fallen sharply in terms of both the number of accounts and value. Stocks & Shares ISA sales on the other hand, have been largely flat […]
ISAs in 2018 – a market in decline?
The UK government recently released the Individual Savings Account (ISA) sales statistics for year ended April 2018 – with some concerning trends. Although £ volumes showed healthy growth, this is a narrowing (and highly segmented) market in terms of customers. For those unfamiliar with the UK market, an ISA is a tax-advantaged savings vehicle in […]
Consumers and Platforms – a new behavioural segmentation model
Our last Citylogue highlighted some key findings from NMG’s consumer research for the FCA’s Investment Platform Market Study – what factors are most important to consumers and how satisfied they are (pretty satisfied at present). The scale of our study – over 3,000 consumers of the top 20 UK platforms – also allowed us to […]
Key Consumer Findings From the Investment Platform Market Study
Platforms now dominate UK retail advised flows, and we discussed in this recent Citylogue the benefits for consumers and advisers. But are consumers actually satisfied? A study undertaken by NMG for the FCA’s Investment Platform Market Study shows the majority of platform investors are in fact satisfied with their experiences in choosing and using […]
Price vs value strategies in UK retail protection
The UK retail protection market is characterised by relatively low customer engagement, with most purchases driven by life-stage triggers such as marriage, property or childbirth, rather than concern about the risk of personal illness or death. With consumer perception of a strong social safety net in place in the form of the NHS and other […]
Platforms and retail market share: how high is high tide?
Platforms have gained a commanding share of retail advised assets. But how commanding and how far will it go? To understand that, it’s worth revisiting the platform value proposition – for investor and adviser. The UK is notable in having a strong platform segment focused on consumers, and another focused on advisers. The two are […]
Value-for-money in UK asset management: taking a deeper look
What to make of the FCA’s PS18/8 Asset Management Study Remedies released last week? It looks like a damp squib in the wake of the key findings of the Asset Management Market Study June 2017 final report, but the value-for-money assessment and related disclosure requirements represent a significant new undertaking – equally an opportunity […]
AE: 10 million reasons why you’d rather be an asset manager than shopowner
In around 10 days, the UK embarks on an experiment of grand proportions when minimum contribution rates for defined contribution (DC) pensions rise from 2% of salary to 8% over just 12 months. A major contribution of the auto-enrolment (AE) of workers has been to highlight the gaping hole in UK pensions coverage. At […]
UK equity release: returning to respectability
In Part 1 of our focus on equity release, we identified the core drivers of a growing equity release market – particularly the gap between the income needs of retirees and the yield potential of their non-housing assets. The potential for an income gap is clear from the gulf between pension and net property […]
Rehabilitating UK equity release
Almost a dirty word following mis-selling incidents, equity release in the UK has experienced something of a renaissance in recent years. 2016 saw lending increase by 34% to pass £2bn for the first time, and Q3 2017 surpassed £800 million – the first quarter exceeding that figure and an increase of 18% on the […]
Why Fidelity’s fulcrum fee model is more radical than it looks
The market reaction to Fidelity’s introduction of a “fulcrum” management fee model in its UK fund range from March 2018 has been – well – a bit underwhelming so far. Objections have included that base management fees are not changing much, that total fees are still too expensive, especially if the fund underperforms, and […]
Streamlined insurance distribution: a digital success story with lessons for wealth
The UK has a vigorous and innovative insurance industry which often leads its wealth and asset management peers in delivering customer value. The growth of streamlined insurance specialists using the digital channel to cost effectively distribute products and assistance is a notable success in its own right, and provides lessons for wealth and asset management. […]
Bottom line vs triple bottom line: making ESG more sustainable
The role of Environment, Social, and Governance (ESG) factors in investment strategy is growing, with the Global Sustainable Investment Alliance sizing the responsible asset management market as $23trn at the start of 2016. This represents a growth in AUM of 25% since 2014. In our institutional asset owner insight programs, we see an increasing number […]
DC pensions: growth is coming; what about revenues and profit margins?
In our launch edition, we looked at how big increases in minimum contribution rates for DC pensions are likely to produce a DC pensions flow opportunity of >£20bn pa by 2019. Thanks to the structure of auto-enrolment and member inertia, fast growth in DC pension assets is largely assured. By 2020, we estimate there will […]
DC pensions: opportunity and challenges as AE turns flows into a flood
The UK is experiencing a pensions revolution at a speed with little precedent globally. Two of the three main components are playing out already, and the third is about to do so: Closure of defined benefit (DB) pension funds in favour of defined contribution (DC). Pensions freedoms, which have upended annuity markets in favour […]