UK fund flows are on the verge of a massive shift. Flows are concentrating to a shrinking number of funds. Retail assets are being re-broked for lower fees. New money is coming in the form of strategic partnerships, deals that come around infrequently and are typically at a lower margin than retail funds. Life is getting tough for asset managers.

Our Shape of Flows report provides the context for the change we are seeing across retail distribution. The report estimates assets by channel, includes fresh adviser research on investment propositions and sets the scene for future flows. It is designed to help set and support strategic decision-making.

The report is available for £1,000 +VAT. If you are interested in getting a bundled price for our Shape of Flows report and tickets to our NextWealth Live conference, we are happy to provide details. As a reminder NextWealth Live will take place on 26 March 2019. This offer applies until 31 January.

Our view

The arguments are set out in more detail in our paper , but here are some of our views:

• There is a concentration of flows to a shrinking number of players. The ways that asset managers will respond will vary depending on their culture, ownership and product set.
• Vertically integrated businesses are successfully driving flows and will continue to thrive. We see no indication that the regulator will scrutinise conflicts of interest in these businesses to any serious degree. The final report of the Financial Advice Market Review, due in 2020 will confirm this.
• The rise of vertically integrated business models will lead to pricing homogeneity. Asset managers will increasingly need to compete on brand (including reputation), service and relationships.
• Outside of vertically integrated businesses, an independent advice market will continue to thrive. But fund choices will be concentrated to a shrinking number of influencers, DIMs, large advice firms and bought in models. Asset managers will need to be exceptional or cheap to compete.
• Price will continue to influence flows – but price as a differentiator will not necessarily apply at the product level.

Our paper sets out the current distribution of retail assets and points to future changes that will concentrate flows. We are bringing together the threads to provide a high-level view of the magnitude of the change. There is not a level playing field and different firms will respond differently to the challenge. At NextWealth, we help firms thrive amid disruption. We help our customers adapt to what’s next in wealth.

Please get in touch if you’d like to more information or to buy the report.

About the Author

Heather is a data and research expert specialising in retail investment distribution. Heather is the Managing Director and Founder of NextWealth. She is also a Director of Clive Waller Consulting Ltd and serves as Vice-Chair of The Investment Network and the Schroders UK Platform Awards.