Product innovation and the impact on advisors 2007

Content

• Overview
• Catalyst
• Summary
• Executive Summary
  • Market Context
  • Advisors Are Predominantly Sole Independent Traders, With A Low Average Case Size
  • Advisors Are Somewhat Optimistic Over Sales Growth For The Coming 6 Months
  • Distribution Dynamics
  • Offshore Bonds Are Commonly Offered To Clients For Investment And Tax Planning
  • The Majority Of Financial Advisors Offer Variable Annuities To Their Clients For Flexibility And The Potential To Earn Higher Income.
  • Two Thirds Of Financial Advisors Offer Sipps To Their Clients While The Initial Surge In Popularity For These Investments Appear To Have Slowed
• Table Of Figures
• Table Of Tables
  • Market Context
  • The Sample Consists Of Predominatly Sole Traders
  • The Financial Advice Market Remains Almost Entirely Independent Or Whole Of Market
  • The Average Business Case Dealt With In This Survey Is Less Than 5,000
  • The Majority Of Business Is Conducted In Pension And Life Based Investments
  • There Have Been Some Notable Changes Since Q2
  • The Majority Expect That Product Sales Will Remain The Same Over The Next Six Months
  • The Majority Of Advisors Expect Life Products Sales To Remain Static
  • Individual Savings Accounts (Isas) Are The Most Likely Products To Increase Their Sales Over The Next Six Month
  • The Majority Of Advisors Expect Protection Product Sales To Remain Static In The Near Future
  • The Outlook For Pension Products Is Bright
  • Financial Advisors Have Very Positive Attitudes Towards Standard Life, Skandia And Legal And General
  • Attitutdes Have Remained Similar To Those In Q2 2007
  • Financial Advisors Are Positive About Invesco Perpetual, Fidelity And Jupiter
  • The Majority Of Financial Advisors Were Somewhat Optimistic About The Future
  • Data
  • Distribution Dynamics
  • 64% Of Advisors Offer Offshore Bond Products To Their Customers
  • A Third Of Advisors Have Experienced A Change In Demand For Offshore Bonds Over The Last 18 Months
  • Offshore Bonds Are Prodominately Used For Investment And Inheritance Tax Planning
  • Other Products Used For Inheritance Tax Planning Are Onshore Bonds, Discounted Gift Schemes And Whole Of Life Policies
  • Advisors Are Torn Over The Attractiveness Of A Regular Premium Payments Into Offshore Products
  • The Key Providers In The Offshore Product Market Are Skandia, Standard Life And Scottish Equitable
  • Skandia Was The Most Popular Provider Of Offshore Bond Investment According To The Respondents
  • Standard Life Offers Offshore Products To The High-End Of The Market
  • Scottish Equitable Offers Three Main Offshore Investment Products To Clients
  • 57% Of Advisors Offer Variable Annuities To Their Clients
  • 34% Of Advisors Had Seen An Increase In Popularity Of Variable Annuities Over The Last 18 Months
  • The Key Advantages Of Variable Annuities Are Percieved To Be Flexibility And Potentially Higher Income
  • For Those Who Do Not See An Advantage To These Products, The Issues That Variable Annuity Providers Face Are Lack Of Income Guarantees And Increasing Customer Awareness
  • Variable Annuities Are Seen To Be Preferable To Traditional Annuity Products Although Less Advantageous Than Income Drawdown
  • Traditional Pension Providers Or Those With Sipp Or Income Drawdown Experience Are Seen As The Most Likely To Suceed In The Variable Annuity Market
  • The Key Providers In The Variable Annuity Market Are Prudential, Canada Life And Norwich Union
  • Prudential Was The Most Commonly Used Provider Of Variable Annuities
  • Canada Life Offers Its Clients A Flexible Range Of Annuities
  • Norwich Union Is One Of The World's Largest Insurance Groups
  • 67% Of Advisors Offer Sipps To Their Clients
  • The Initial Surge In Popularity Of Sipps Appears To Have Slowed
  • Regulatory Moves To Simplify Sipps Are Not Yet Having The Desired Effect
  • 70% Of Advisors Feel That The Charging Structure Of Sipps Is Getting Simpler
  • Much Of The Product Innovation Is In Fact Seen To Be In The Delivery Platforms Rather Than The Sipp Product
  • The Majority Of Business Is Put Into Full Sipp By The Surveyed Financial Advisors
  • There Is Unlikely To Be A Significant Change In This Business Mix Over The Next 2 Years
  • The Key Providers In The Sipp Market Are Standard Life And Scottish Equitable
  • Standard Life Is A Leading Provider Of Sipps In The Uk
  • Scottish Equitable's Sipp Products Provide Clients With Control In The Timing And Size Of Income Payments
  • Advisors Have Mixed Views On The Usefulness Of Group Sipps
  • The Flexibility Of Investment Choices Is One Of The Key Advantages Of Group Sipps
  • There Were Few Respondents That Perceived Advantages Of Joining A Group Sipp For Mass Market Clients
  • Data
• Appendix
  • Definitions
  • Pension Product Definitions
  • Personal Pensions
  • Stakeholder Pensions
  • Group Self-Invested Personal Pensions (Group Sipps)
  • Employer Sponsored Stakeholder Pension (Ess)
  • Sipps (Self Invested Personal Pensions)
  • Definitions Of Distribution Channels
  • Independent Financial Advisors (Ifas)
  • Tied Agents
  • Multi-Tied Agents
  • Matrix Definitions
  • Methodology
  • Further Reading
  • Ask The Analyst
  • Datamonitor Consulting
  • Disclaimer
• List Of Tables
  • Table 1: What Percentage Of Your Business Is Conducted In Each Of The Following Areas?
  • Table 2: Over The Next Six Months How Do You Expect Sales In Each Of The Following Products To Change?
  • Table 3: Which Of These Statements Best Describes Your Attitude To These Insurers? (Q3 2007)
  • Table 4: Which Of These Statements Best Describes Your Attitude To These Insurers? (Q2 2007)
  • Table 5: Which Of These Best Describes Your Company?
  • Table 6: What Business Model Do You Operate?
  • Table 7: What Is The Average Case Size Of The Business You Deal With?
  • Table 8: What Percentage Of Your Business Is Conducted In Each Of The Following Areas?
  • Table 9: Over The Next Six Months How Do You Expect Sales In Each Of The Following Products To Change?
  • Table 10: How Do You Feel About These Insurers?
  • Table 11: How Do You Feel About These Mutual Fund Providers?
  • Table 12: Do You Believe In The Next 6 Months The Uk Financial Advice Market Will:
  • Table 13: Have You Seen A Continued Surge In Popularity For Sipps Over The Last Three Months?
  • Table 14: Do You Offer Offshore Bond Products To Your Customers?
  • Table 15: Have You Seen An Increase In Popularity Of Offshore Bonds Over The Last 18 Months?
  • Table 16: What Purposes Do Your Customers Use Offshore Bonds For?
  • Table 17: Is The Option Of A Regular Premium Payment Into An Offshore Product Attractive To Your Customer Base?
  • Table 18: Do You Offer Variable Annuity Products To Your Customers?
  • Table 19: Have You Seen An Increase In Popularity Of Variable Annuity Over The Last 18months?
  • Table 20: Do You See Any Advantages Of Variably Annuities For Your Client Base?
  • Table 21: Which Of The Following Types Of Provider Do You Think Is Best Placed To Capitalize On The Variable Annuity Opportunity?
  • Table 22: How Would You Rate Variable Annuities Against Income Drawdown For Generation Of Income?
  • Table 23: How Would You Rate Variable Annuities Against Conventional Annuities For Generation Of Income?
  • Table 24: Do You Offer Sipps To Your Customers?
  • Table 25: Are Charging Structures For Sipps Getting Simpler?
  • Table 26: Have You Seen A Continued Surge In Popularity Of These Products Over The Last 3 Months?
  • Table 27: Are The Fsas Moves To Improve Transparency And Simplicity In Sipps Having Any Impact?
  • Table 28: Are The Key Sipp Innovations Actually In The Delivery Platforms Rather Than The Products?
  • Table 29: What Proportion Of Your Sipp Business (In Terms Of Value) Do You Place In Each Of The Following?
  • Table 30: Do You Expect These Proportions To Change Over The Next 2 Years?
  • Table 31: Are Group Sipps A Key Innovation In The Sipp Market?
  • Table 32: What Are The Key Advantages To Group Sipps?
  • Table 33: Is There Any Advantage To Mass Market Employees Of Joining A Group Sipp Program?
• List Of Figures
  • Figure 1: Sole Traders Constitute 36% Of The Total Survey Sample
  • Figure 2: The Majority Of Advisors Operate An Independent Business Model
  • Figure 3: Most Advisors Deal With An Average Case Size Of Less Than 5,000
  • Figure 4: Young Adviser Deal With Higher Average Case Size Than Their Older Colleagues
  • Figure 5: Pensions And Life-Based Investments Demonstrate The Largest Business Areas
  • Figure 6: The Majority Expect The Sales Of Life Products To Remain The Same Over The Next Six Months
  • Figure 7: Respondents Believe Mutual Funds And Isas Are Expected To Increase Their Sales
  • Figure 8: Protection Products Are Likely To Have Static Sales In The Coming Six Months
  • Figure 9: Personal Pensions And Sipps Sales Look To Be Positive Over The Next Six Months
  • Figure 10: Standard Life Are The Most Popular Insurer In Q3
  • Figure 11: Invesco Perpetual Is The Most Popular Mutual Fund Provider
  • Figure 12: Hsbc Stand Out As The Least Popular Mutual Fund Provider
  • Figure 13: Over Half Of The Surveyed Financial Advisors Expect Some Growth In The Next Six Months
  • Figure 14: The Majority Of Financial Advisors Offer Offshore Bond Products To Their Customers
  • Figure 15: The Majority Of Financial Advisors Have Seen No Change In Demand For Offshore Bonds
  • Figure 16: Customers Use Offshore Bonds Mostly For Inheritance Tax Planning And Investment
  • Figure 17: Is The Option Of A Regular Premium Payment Into An Offshore Product Attractive To Your Customer Base?
  • Figure 18: The Majority Of Advisors Offer Variable Annuities To Their Clients
  • Figure 19: The Majority Of Advisors Have Seen No Change In The Popularity Of Variable Annuities Over The Past 18 Months
  • Figure 20: The Majority Of Advisors See Some Advantages For Their Clients In Variable Annuities
  • Figure 21: The Majority Of Advisors Prefer Variable Annuities Over Traditional Annuities For Generating Income
  • Figure 22: Most Advisors Prefer Income Drawdown Over A Variable Annuity For Income Generation
  • Figure 23: Traditional Pension Providers And Sipp Or Income Drawdown Specialists Are Most Likely To Capitalize On The Variable Annuity Opportunity
  • Figure 24: Two-Thirds Of Advisors Offer Sipps To Their Clients
  • Figure 25: The Majority Of Advisors Believe That The Fsa's Efforts To Improve Transparency And Simplicity In Sipps Is Having No Impact
  • Figure 26: The Majority Of Advisors Agree That Sipps Charging Structure Is Becoming Simpler
  • Figure 27: Two Thirds Of Respondents Stated That Sipp Innovation Came From Delivery Platforms Rather Than The Products Themselves
  • Figure 28: Full Sipp Represents The Largest Proportion Of Sipp Business For Advisors
  • Figure 29: The Majority Of Financial Advisors Expect Sipp Business To Stay The Same Over The Next Few Years
  • Figure 30: Are Group Sipps A Key Innovation In The Sipp Market?
  • Figure 31: What Are The Key Advantages Of Group Sipps?
  • Figure 32: Is There Any Advantages To Mass Market Employees Of Joining A Group Sipp Program?