There was also a decline in both the proportion of advised sales and the proportion of sales with single payments, the FSA reports.
Total annual sales of retail investment products were also marginally down in what was a volatile year.
The regulator says aggregate sales of retail products in 2010/11 declined 0.6% from 2009/10, with marked variation across different product types.
“The number of selling firms in the market for retail products was significantly more volatile than the number of provider firms and seems to be affected by market conditions,” its report stated. “Low interest rates have made fixed-income products relatively unattractive. This may have persuaded investors to enter into comparatively higher risk equity investments.”
The regulator believes the combination of high unemployment, declining real household incomes and economic uncertainty had undermined investor’s ability to focus on longer-term savings goals. For this reason, it suggests precautionary savings had taken precedence.
Since April 2005, investment product providers have been required to provide the FSA with transaction level data on all sales of retail investment products to retail and private customers. This covers direct sales by firms’ own sales forces and sales made via intermediaries.
