Coredata in the United Kingdom plays a similar role to its Australian partner, brandmanagement. What are the differences between the CoreData research mandates in the UK and Australia? What do UK fund managers want to know?
We are getting wraps developing in the UK, mainly mini-wraps for individuals. Personal accounts are due to come into the UK in 2012 and super will be a great learning opportunity for that.
We’re in the process of putting out a reputational survey for small businesses for Daltons Business. That survey is looking at commercial loan providers. It will be out in February. The awards are an attempt to get the standards reviewed. This is the first year that CoreData has been involved.
We are also doing work for Standard Life on the wrap side. I’m about to do some research for that. There is also the general pensions survey, which showed the level of disillusionment that people wanted more flexibility in the way they take pensions, because now people have to buy annuities and especially these days if someone retired at age 60-65 they could easily live to 85. SIPPs [self-invested personal pensions] allow income draw down for more sophisticated better-off retirees, but the danger is you could run out of money.
What are some of the differences in the markets you cover?
In Australia, we offer Grange wine for surveys to [be completed by] planners. In China, we offer consumer goods such as iPods, and in the UK, holidays are popular.
What are the areas of interest that may be peculiar to the UK at this time?
Because it’s [CoreData] building up in the UK, it’s doing more customer research, still going out building relationships with CoreData, and Standard Life is a good example. Hopefully, in the UK we can do benchmarking studies for SIPPs and wraps.
Advisers would be a good area to cover in the UK because there are a lot of changes.
The other area to cover in the UK would be consumers. FT Business has just taken a mini-poll for their website and we’ve done a bit of work on the annual finance service awards.
What synergies are there between the Australian and UK businesses?
Invesco and Perpetual were interested in how channels develop, what sort of products people want. Will mutual funds be continuing in the future? Who makes these decisions? Who makes these decisions – is it the consumers or is it the providers? ETFs [exchange traded funds] are coming in a bit more as a new product. They will get a big boost in the next year or two, which will compare them to mutual funds.
What sort of differences are there?
In the UK there has been more investment in equities. There have been products “with profits” that don’t get sold now. Life insurance products were run by actuaries, with equities, assets, fixed interest and property to smooth out profits. It was opaque. It was hard to tell which was a good or a bad fund in the short term.
However, if you now talk to lots of advisers about what sort of products they would like to see, they come up with an idea very similar to the “with profits” funds.
Regulation has been a bit of a bee in the bonnet. It’s been driven a lot by life offices who have been paying out large up-front commissions. They’ve finally gotten together and said this has to change. This has been going on for about a year.
Looking at Australia, it’s more looking at wrap and super. For fees we look more towards the US – and look how they charge fees. In the UK, we’re overwhelmed by the interest in wraps and super. They are the two things that stand out from a financial advisers’ perspective.
On the investment side, look at the US because it does have a big effect, ETFs, hedge funds, on the institutional side it has more of a knock-on effect.
What are the biggest issues for you right now?
A lot of things we’ve talked about is on wraps and platforms, and changes to the distribution and the way that IFAs [independent financial advisers] are more organised and aligned to providers. There’s still a debate on advising, should you be owned by a product provider.
It’s the same with wraps. It was that people [in the UK] had one but are now looking at two or three wraps, like Australia, to suit different segments of their clients.
