Already such revenues have shrunk from 150bps to 100 over the past 24 to 36 months, they report. As a result of this fee contraction, more than half of those surveyed say they are actively targeting the mass affluent space. A further 40% are targeting HNW clients and most appear to be losing interest in client relationships below a quart of a million pounds, the research states.
On behalf of Momentum, Scorpio Partnership undertook in-depth research among 40 wealth managers and independent wealth advisers across the UK, Singapore and Hong Kong. Collectively those covered in the research manage in excess of $8bn.
Scorpio Partnership points out that as a result of combined fee and regulatory pressures, many advisers are re-focusing their propositions. This in turn has a knock-on effect on the services they are seeking from product providers.
For instance, IWAs are increasingly selecting discretionary fund managers that provide them with a more active role in the shaping of their investment propositions. The research says: “Advisers commented that in the future the market will look radically different with the advisers setting the investment mandates rather than the product providers.”
In addition, for any outsourced discretionary service, including bespoke portfolios, advisers will expect providers to deliver detailed reporting including an indication of the performance of the portfolios in relation to the clients’ financial goals and timelines.
Another expected change in IWA client offerings is growth in the use of passive strategies. The Momentum/Scorpio Partnership research highlights more than 50% of wealth advisers have introduced passive solutions into client portfolios within the past three years.
