These are the findings of research by Scorpio Partnership James that also puts the wealth management contribution to the UK economy at 1% alongside a tax payment of £7.6bn to HMRC.
Scorpio Partnership carried out the research “to build a common understanding of the market place”.
Sebastian Dovey, managing partner at Scorpio Partnership, said: “The objective of the initiative was to underscore the net value of the industry to the UK economy in these complex market conditions. This industry and its professionals manage the personal wealth of the engine room of growth for the UK economy. Our aim has been to identify for the first time what the sum total of this activity represented.”
The industry was segmented into segments including high net worth private banks, mass affluent private banks, private client investment managers and wealth management IFAs. It also included service providers such as platforms, trustees, accountants and lawyers.
In total, the industry directly employs 124,000 professionals generating £30bn in annual revenues.
Additional key findings
- There are 448,090 individuals with investable wealth in excess of £500,000;
- The revenue generated by the industry may be 20% below the potential revenue generated in other competing financial services centres operating wealth management due to regulatory and compliance factors;
- Wealth management services for ‘premier’ clients (typically with investable assets between £100,000 and £1m) are generating significantly higher returns than the service providers at the larger account sizes. Typically the gross profit margins are as much as 25%-35% greater.
