New research(1) from Willis Owen, the leading UK online investment platform, reveals that 17% of IFAs and wealth managers are looking to leave the industry over the next three years, with one in five (20%) saying it’s partly because there is too much regulation in the market. Just over half (53%) are contemplating retiring between now and 2021, and 17% said they are planning to leave the industry because their margins have fallen.
During this period, 68% of IFAs believe that the overall number of financial advisers will fall – with 8% expecting a dramatic decline.
Of those IFAs and wealth managers remaining in the industry, 24% said they are planning to increase the minimum balance/AUM requirements of a client’s portfolio if they are to continue or start offering them financial advice. Some 37% claim to have done this over the past three years.
Further new research (2) from Willis Owen, which has recently launched a range of seven ‘starter’ portfolios designed for novice investors with no additional fee, reveals the decline in the number of financial advisers could have a devastating effect on the level at which people save. Some 73% of those who don’t currently invest in stocks and shares ISAs claim they would start doing so if they had a better understanding of how to invest and their risk profile, and of these people, 35% anticipate that they would invest at least £1,000 more a year as a result of this.
Adrian Lowcock, Head of Personal Investments at Willis Owen, said
|How much more people would invest in a stocks and shares ISA over the course of a year if they had greater help in selecting funds and understanding their risk profile
||Percentage of people who don’t currently invest in a Stocks & Shares ISA who would invest this extra amount
|Up to £250
|Between £251 and £500
|Between £501 and £1,000
|Between £1001 and £2,500
|Between £2501 and £5,000
: “Our research findings are very alarming, and they suggest that people could find it harder than ever to secure professional advice regarding their savings and investments. At a time when people need to take greater responsibility over their financial planning, this could have a devastating impact on the quality of their lives – especially when they retire.
“This is one of the reasons why we launched our range of starter portfolios, which has combined the investment expertise of our own research team, and the extensive tools provided by Morningstar. These portfolios are designed to help new, or indeed existing investors, get off to a good start when building a diversified portfolio and avoid some of the common mistakes.”
Willis Owen starter portfolios
These portfolios are designed to help people who want to make their own investment decisions but require support with getting started. They are comprised of three active, three passive and one income product. The active and passive portfolios are split into cautious, moderate and adventurous risk buckets. Novice investors using the starter platforms will gain access to Willis Owen’s platform as well as educational support for a minimum of 12 months.
They have been selected by the Willis Owen research team – Liz Rees head of research and Adrian Lowcock head of personal investing – using the Morningstar DirectSM team of over 100 analysts to narrow down the range of funds available.
The funds have been selected primarily on long term performance potential and with an eye on costs, especially in the passive range where costs are an automatic drag on performance. We have also considered the overall risk of the combined funds to ensure they are complementary and suitable for the target market/investors.
Meanwhile, in adding Morningstar DirectSM
to its service to provide enhanced analytics, Willis Owen clients will have greater functionality and more detailed information on funds and equities. The new service provides greater transparency on the underlying holdings of funds, enabling Willis Owen investors to determine the extent of any overlaps.
Investors can also use it to assess the styles of funds, to determine whether they aim for ‘growth’ or ‘value’, their sensitivity to interest rate movements and sector and geographical exposures. Those who want environmentally-friendly portfolios can check the carbon ratings of the funds they hold. Investors can also drill down to individual stocks, assessing whether their prices offer fair value based on their long-term intrinsic values.