Citylogue

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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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