UK leads fragmented European advice market
Themarket for financial advice in Europe is highly fragmented according to a report by independent market analyst Datamonitor, with the United Kingdom and Germany leading the way in the independent financial advice (IFA) market.
The report,European FinancialAdvisers 2003, shows that within the United Kingdom, IFA’s are the most important financial services product channel, accounting for 61 per cent of gross sales of mutual funds and 60 per cent of gross premiums in life and pension products.
In Germany, financial advisers hold a smaller but significant part of the market, while the Italian market is in its infancy and the French and Spanish markets are less independent, as financial advisers are linked to businesses such as trust companies.
“There are currently no established pan-European financial advice companies due to regulatory difficulties, however, leading players in the United Kingdom and German markets are now looking to expand,” Datamonitor financial services analyst Oliver Guirdham says.
According to Datamonitor, the majority of financial advisers in Europe focus on wealthy customers, with most financial advisers having an average customer age of 46-60.
In the United Kingdom, 58 per cent of advisers focus on the mass affluent customer, though 40 per cent of advisers declared they targeted the younger age group of 31-45.
The survey found that mutual funds are the most popular product for 68 per cent of financial advisers in Europe, with the next most popular products being equities, life insurance-based products and pure life insurance.
Only 13 per cent of financial advisers cited commission levels as an important factor in choosing a product provider, with advisers regarding investment performance as the most important criteria.
The Datamonitor survey also found that 56 per cent of financial advisers across Europe believe they have a good reputation, though in the United Kingdom alone it was 90 per cent of advisers. Only 15 per cent of European advisers believe they have a bad reputation.
Recommended for you
Licensee Centrepoint Alliance has completed the acquisition of Brighter Super’s annual review service advice book, via Financial Advice Matters.
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
