UK Wealth Management – Competitive Dynamics 2019

The wealth management industry saw a sharp slowdown in asset growth in 2018. Individually, wealth managers saw mixed success, with the strongest growth stemming from continued merger and acquisition (M&A) activity. Market uncertainty dominated the year, with record levels of outflows resulting in several key funds being suspended and heavy losses for investors. The sentiment behind these withdrawals was linked strongly to the Brexit process. Following the UK’s eventual exit from the EU in January 2020, EU rules will continue to apply until a future trade framework is agreed between the UK and the EU – marking a degree of ongoing uncertainty. Against this backdrop, the Financial Conduct Authority (FCA) announced rules to stem future liquidity crunches, protecting investors and wealth managers alike.

This report provides an overview of the top wealth managers in the UK, based on business model and minimum investment thresholds as well as rankings based on assets under management. It explores regulations that pertain to wealth managers and offers insight into recent M&A activity, new entrants to the UK market, and divestment activity. The report also examines product and service innovations and personalized offerings.

Scope

– St. James’s Place, Barclays, and UBS Wealth Management remain the largest brands by assets under management (AUM), cumulatively accounting for just under a third of the assets managed by the top 20 wealth managers.

– Market conditions were significantly more challenging than in recent years. Annual growth slowed to just 1% in 2018 compared with 10% in 2018.

– Larger wealth managers sought growth by expanding into standalone territory, including digital advice, financial advice, and diversified wealth solutions.

Reasons to buy

– Benchmark your market share against the top 20 UK performers.

– Understand drivers for AUM growth among leading wealth managers in the UK.

– Gain insight into M&A activity and organic growth for both new entrants and incumbents.

– Understand the growth within robo-advice services.

Companies mentioned

Barclays

Brewin Dolphin

C.Hoard & Co

Canaccord Genuity Wealth Management

Cazenove Capital

Charles Stanley &Co

Citi Private bank

Coutts

Davy Private Clients

Fidelity

Financial Conduct Authority

Goldman Sachs

Hargreaves Lansdown

Harwood Wealth Management

Hassium Asset Management

HSBC

Investec Wealth & Investment

J.P. Morgan Private Bank

J.Stern &Co

Kleinwort Hambros

Lloyds Banking Group

Man GLG

Mattioli Woods

Moneyfarm

Nutmeg

Quilter Cheviot

Rathbone Brothers

Sandaire Investment office

Sanlam UK

Schroders

SCM Direct

Smith & Williamson Investment Management

Speirs & Jeffrey

St James’s Place Wealth Management

Standard life

Tilney

UBS Wealth Management

Wealthify

WealthSimple

Woodward

My Eva

Multiply

FCA

Table of Contents

Table of Contents

1. EXECUTIVE SUMMARY

1.1. Market summary

1.2. Key findings

1.3. Critical success factors

2. THE UK WEALTH MANAGEMENT MARKET

2.1. Market slows amid ongoing uncertainty

2.2. The UK political landscape was a source of anxiety in 2019

3. WEALTH MANAGEMENT COMPETITIVE DYNAMICS

3.1. The market is split between onshore and offshore players

3.2. Leading managers see growth in a competitive landscape

4. REGULATORY TRENDS

4.1. Woodford, fund withdrawals, and rule reforms

4.2. Towards a more transparent and competitive market

4.3. Growth in ethical funds comes with increased scrutiny

4.4. Many firms are struggling with the MiFID II rules

4.5. Robo-advice evolved but regulation struggled to keep up

4.6. Industry fines increased in 2019

5. COMPETITIVE TRENDS

5.1. Brands are consolidating to drive growth and stability

5.2. Large wealth managers are restructuring to boost growth

5.3. New and emerging entrants include Santander’s focus onthe HNW market

5.4. New products and services were launched amid market challenges

5.5. Digital developments include a cryptocurrency-based investment service

6. APPENDIX

6.1. Abbreviations and acronyms

6.2. Definitions

6.3. Secondary sources

6.4. Further reading

List of Tables

List of Tables

Table 1: Pre-election headlines from mainstream news providers, October to December 2019

Table 2: Post-election headlines from mainstream news providers

Table 3: Overview of events leading to the ratification of the EU Withdrawal Agreement Bill

Table 4: In 2019, fractious Brexit negotiations had a measurable impact on the UK economy

Table 5: Examples of different onshore wealth management providers

Table 6: Snapshot of 2019 activity

Table 7: Competitors with the highest investment thresholds

Table 8: London and the South East account for a third of the country’s HNW liquid assets

Table 9: AUM performance for the UK’s top 20 wealth managers, 2017-18

Table 10: The Woodford collapse led to new rules restricting the way investors withdraw from funds

Table 11: FCA fines relating to MiFID I breaches since 2009

Table 12: Over half of industry fines in 2019 related to the wealth industry

Table 13: Selected wealth managers M&A activity, December 2018 to November 2019

List of Figures

List of Figures

Figure 1: Liquid assets held by HNW individuals have increased by £0.25tn since 2015

Figure 2: Growth in liquid assets held by HNW individuals slowed rapidly in 2018 but recovered in 2019

Figure 3: Growth in liquid assets slowed for the UK’s largest wealth managers

Figure 4: Equities, which account for over half of UK assets, contracted by 9% in 2018

Figure 5: Top 10 wealth managers in the UK by AUM in 2017 and 2018

Figure 6: Ethical funds growth was seven times greater than growth for total investments

Figure 7: Wealth managers agree that robo-advice is key to a sustainable business and future success

Figure 8: The value of FCA fines increased significantly in 2019

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