Press Release: Another Strong Year with Investment Assets & Revenue Up Over 15% - 28.02.2007
Preliminary results from ComPeer’s annual benchmarking of the wealth management sector show another strong year with investment assets and revenue both up over 15%.
Data from the ComPeer’s quarterly update, pending the full annual report, show healthy performance by all sectors, with particular highlights in the strong levels of asset growth and the performance of the execution only sector.
Growth in investment assets looks broadly comparable with 2005, when assets grew just over 17%. However, more of that growth can be attributed to new business, with the FTSE APCIMS Balanced index up just 6.8% year on year. Revenue growth also looks to have outperformed 2005 which again suggests more new money coming into the sector at standard tariffs, rather than business transferring between firms where fees often end up being discounted. Increased product diversification is also contributing to revenue growth.
“There is no question that firms have attracted new money into the sector and the strong asset growth has, for the first time in several years, not just reflected market levels. We expect full year numbers to show strong profitability off the back of this growth.” said
Many firms are reporting a doubling of SIPP assets. Whilst still a relatively small proportion of total assets, it is almost certainly a driver in the strong levels of new business.
SIPP services are also contributing to the strong performance in the Execution Only sector, with revenues up over 20% and assets in nominee accounts up 14%. Revenue per trade is at its highest levels since pre-2000, reflecting strong levels of ancillary income and better quality business.
“The Execution Only sector is an increasingly attractive sector after several tough years. The investment in technology is allowing them to provide high quality, low cost access to a wide range of financial products and this is clearly proving attractive to investors”.
ComPeer provides competitor benchmarking, research services and industry insights to the wealth management sector. Its annual wealth management industry report is published in May. If you would like to participate in the benchmarking survey or require further service details, please contact ComPeer at mike.levy@compeer.co.uk.