6 October 2006
New research by Winterthur Life and undertaken by MDRC1 suggests that high net worth individuals (HNWIs) back pensions, with 96% holding a penson plan, and value professional advice, with 75% using a financial adviser.
Most HNWIs (73%) are members of a company-based scheme, with the remainder holding SIPPS or personal pensions. The majority of HNWIs holding personal pensions intend to move to SIPPs.
Of the HNWIs who use a professional financial adviser, 51% currently use an IFA, with accountants second on 19% - only minor growth is expected for these groups over the next 12 months. When asked how they use their adviser, 68% said for both advice and purchasing of financial products and 32% said just advice, preferring to deal direct with product providers themselves. This supports the argument that adviser remuneration should not be tied solely to a product but linked to the advice given.
When asked about their long term financial priorities, the top reasons given were to have a comfortable retirement (85%) and to maintain their standard of living (82%). Improving standard of living, increasing wealth and leaving a significant estate all scored below 40%, which might have historically scored higher.
The survey also suggests that HNWIs are financially aware, with 72% conscious of A-Day, and 84% of those, clear on the changes introduced as part of A-Day. Asked if they would be making changes to their pension arrangements as a result of A-Day, 18% said they had or were planning to do so. Interestingly, HNWIs supplement their knowledge by sourcing financial advice from newspapers and specialist financial publiciations, with 61% and 21% citing these respectively.
HNWIs were also asked about their attitudes towards technology. Some 12% said they were interested in using technology like a comprehensive portfolio management system and nearly 30% said they were aware of fund selection and Microsoft Money style applications. On the question of whether they would consider buying, arranging or managing financial products online, the vast majority said they would in the future, with equities (68%), credit cards (81%), ISAs (72%), savings accounts (60%) and personal pensions (33%) – a predicted large increase on current usage.
David Thompson, director of distribution, Winterthur Life, says, “HNWIs are clearly more financially sophisticated than they once were - their understanding of A-Day and their appetite for sourcing financial advice via the media underlines this.
“There is growing evidence that suggests the threat of non-traditional financial advice via the media and the web, and adviser business models that don’t reflect a HNWI’s changing needs, could accelerate a general move away from independent advice.
“It is therefore critical that advisers embrace new online technologies and update their business models, which can put advisers back in the driving seat, by helping them demonstrate added value investment and portfolio management solutions. This should, in turn, help them improve relationships with clients through improved client segmentation and drive improved efficiencies in the adviser practice’s back office, releasing more time and resources to what they do best – advise,” Thompson concludes.
-End-
1 Mdrc-uk.com – based on initial findings commissioned exclusively for Winterthur Life as part of the soon to be published UK High Net Worth Market 2007 report. Interviews were undertaken in September 2006 amongst 277 HNW individuals aged between 40 and 65 with a minimum of £250 K in free investable assets.
For further information:
Paul Riddell Winterthur Life, Press Office +44 (0)1256 798099
Sandra Fulton Winterthur Life, Press Office +44 (0)1256 798310
Christine Wood Financial Dynamics +44 (0)20 7269 7253
Notes to Editors
About Winterthur Life UK Limited
Winterthur Life UK Limited is part of Winterthur Group, a leading Swiss insurance company with its international headquarters in Winterthur, Switzerland.
Winterthur Life UK offers pensions and investments for high net worth clients distributed via top tier IFAs and is renowned for its innovative approach to financial products. Its philosophy of transparent product propositions offers advisers a range of retirement and investment solutions with an open charging structure.
Winterthur Life UK is an experienced provider of single premium personal pensions, trustee investment plans and corporate pensions via IFAs and a leading provider of self-investment retirement plans like Self Invested Personal Pensions (“Sipps”).
Any opinions expressed in this media communication are made as at the date of publication but are subject to change without notice. Past performance is not a guide to the future. The value of shares/units and the income from them can go down as well as up. Exchange rate fluctuations may cause the value of underlying investments to fall as well as rise. Yields are not guaranteed and may fall or rise.
Winterthur Life UK Limited is authorised and regulated by the Financial Services Authority.
www.winterthur-ifa.co.uk
Winterthur Group
Winterthur is the leading insurer in Switzerland, and ranks among the top ten all-line carriers in Europe. With a history spanning more than 130 years, Winterthur's life insurance, pension and non-life businesses are based mainly in Western Europe, but the group also has activities in Central and Eastern Europe, the US and Asia. Using a variety of channels, the group manages a balanced product portfolio for private clients as well as small and medium-sized companies. Winterthur operates in 17 countries, and has around 19,000 employees and 13 million clients worldwide. In the first half year of 2006, the group achieved a business volume of 18.8 billion Swiss francs, and reported assets under management of 157.4 billion Swiss francs as of June 30, 2006. Winterthur is a 100% subsidiary of Credit Suisse Group, a leading global financial services company headquartered in Zurich. Further information about Winterthur can be found at www.winterthur.com.
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