DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
EXECUTIVE SUMMARY 2
MARKET SIZE 3
The European market for private investments is robust and growing 3
Market growth is having an important effect on the distribution landscape 3
Liquid assets in Germany and the UK are particularly high 3
Liquid assets across the key European markets are projected to grow strongly in value 4
The growth in the value of long term investment assets is more variable across Europe 5
The UK is home to a proportionally large number of high net worth individuals 7
The number of mass affluent and high net worth individuals is projected to grow steadily 8
Overall growth in the high net worth sector is predicted to be even stronger 9
The sophistication of the financial advisory sector varies widely across Europe 11
The financial intermediary population is often swelled by largely unqualified advisors 11
The regulatory purity of investment markets in Europe varies widely 12
Limited regulation in Germany may open up opportunities for quality investment advice 12
The UK and Switzerland are subject to detailed regulatory guidelines 12
The IFA sector in the UK is particularly well developed 13
Single tied advisors dominate the advisory markets in a majority of European countries 14
Bancassurance is currently the dominant distribution channel in Europe 15
A significant proportion of long term investment assets are distributed via the bancassurance channel 15
France is the largest bancassurance market in Europe 15
The distribution landscape in Germany is slowly diversifying 16
The UK and Switzerland represent exceptions to the rule 16
Data 17
MARKET DRIVERS 22
The bancassurance channel is very strong across most of Europe 22
In continental Europe, the bancassurance channel dominates the distribution of retail investment products 22
Consumers in much of Europe are unused to paying for financial advice 22
The strength of the banking channel is driving the development of bancassurance partnerships 22
Demographic change is stretching state pension schemes to breaking point 23
The support ratio is decreasing in almost all European countries 23
The closure of defined benefit schemes is polarizing the market 23
Mass market consumers are driving demand for long term investments via the bancassurance channel 23
However, as defined benefit schemes close, more affluent consumers are seeking independent advice 23
In turn, this has driven the development of partnerships with firms of financial advisors 24
In the UK, foreign and domestic banks are responding to consumer demand for long term investments 24
Foreign banks have identified an opportunity to compete with the IFA sector in the UK for top end clients 24
Domestic banks are considering developing their own distribution channels 24
REGULATION 25
Regulatory change has had a key impact on the investment and savings landscape in Europe 25
The Financial Services Action Plan was intended to create a unified financial services market in Europe 25
Insurance Mediation Directive 25
Markets in Financial Instruments Directive (MiFID) 25
Other pieces of national legislation are also having an impact on the investment distribution landscape 26
A new financial advice certificate is being developed in Spain 26
The new status of Conseiller en Investissement Financier has been established in France 26
The effects of depolarization in the UK are slowly effecting a shift in the distribution landscape 26
The Treating Customers Fairly initiative in the UK was intended to ensure the quality of financial advice 27
ACTION POINTS 28
European markets offer strong potential for distributing investment products 28
Demand for investment products is growing across Europe 28
Increasing demand combined with the impact of regulation is opening up the distribution landscape 28
Distribution strategies must be tailored to different markets and market segments 28
Each market and consumer segment requires a clearly differentiated strategy 28
In order to develop effective distribution networks, partnerships can be highly effective 28
As the pensions market evolves, opportunities emerge to sell new investment products 29
Variable annuities may become a more prominent feature in the European investment landscape 29
APPENDIX 30
Definitions 30
Further reading 31
Ask the analyst 31
Datamonitor consulting 31
Disclaimer 31
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