The UK wealth market

 Individuals in the mass affluent market with around £50,000 to £5 million of investable assets are estimated to control around 67% of UK investable wealth (source: GlobalData), and that proportion increases when we think about people either side of those thresholds who are also in our target marketplace. We know that the market opportunity is even greater when we consider personal pension assets and insurance-wrapped savings. Household wealth is highest for those with a head of household aged between 55 and state pension age, with the median average wealth of those households approximately 25 times the average wealth of those with a head of household aged between 16 and 24 (source: Office for National Statistics). This shows the extent of asset decumulation we can expect in the years and decades ahead, and the scale of intergenerational wealth transfer to come.

Increasing demand for financial advice

We estimate that there are approximately 13.1 million individuals in the mass affluent market in the UK, including 3.7 million who are currently non-advised but are open to receiving financial advice (source: Royal London – Exploring the Advice Gap report). Looking more broadly than the mass affluent market, according to Prudential UK’s Family Wealth Unlocked report, 53% of UK adults say the financial crisis caused by COVID-19 has prompted them to seek or plan to seek advice from a financial adviser.

We know that this is because financial advice creates real value and helps individuals to feel confident in their financial futures, which is referenced in research from the likes of Vanguard, Morningstar and the International Longevity Centre. In recognition of this market opportunity we’ve seen many developments in the DIY investment platform market, as well as in robo-advice offerings. But demand for personal, face-to-face advice has continued to grow as people lacking the time, inclination or confidence to manage their financial affairs, seek help from a trusted adviser. We expect demand for face-to-face advice to only get stronger.

That’s because there are a number of systemic factors driving the need for advice:

• complexity of personal taxation;
• decline of defined benefit pension schemes;
• options and challenges open to savers through ‘pensions freedom’;
• scale of the UK savings gap; and
• intergenerational wealth transfer.

Demand for advice is therefore increasing, but there aren’t enough advisers in the UK to meet it. The shortfall is likely to worsen as more and more experienced advisers approach retirement or sell their businesses: the average age of a financial adviser in the UK is 58 (source: Professional Adviser). There’s already an ‘advice gap’ today and we think this will widen.

How SJP can benefit from the market opportunity

We’re the leading advice-led wealth management business in the UK, with 4,693 advisers at the end of 2022. We have a proven track record of attracting and retaining great financial advisers, as well as those looking to build a new career with us through our Academy programme, which means our adviser population is growing.

Our advisers have an average age of 46 and so are able to establish and build long-term relationships with clients. Those training in our Academy have an average age of 35. As a result, we are ideally placed to take advantage of the increasing demand for financial advice.

Competition in the advice market

There are a wide range of offerings in UK wealth management and the financial advice profession, ranging from technology-led solutions to the holistic face-to-face financial advice service that we provide. In recent years, we have seen an increase in the number of businesses looking to establish themselves in UK financial advice, with this interest reflecting the scale of opportunity in what remains a growing and under-served market.

We are staunch advocates of the need for individuals and families to become more financially resilient and more confident of their futures, but we know that holistic financial planning advice, delivered by highly qualified professional advisers, will not be accessible to all. We’re therefore very supportive of efforts and initiatives, whether led by companies, regulators or legislators, to help more people make better decisions around their basic finances.

Our UK market

The mass affluent market in the UK is often defined as individuals with between £50,000 and £5 million in investable assets. There were estimated to be 13.1 million such individuals at the end of 2022, and this number is expected to grow to 14.3 million by the end of 2026 (source: GlobalData).

The liquid assets of this group are forecast to increase from £2.6 trillion to £3.0 trillion in this time (source: GlobalData).

We target the mass affluent market but also look after clients either side of this space, be it individuals in the early stages of accumulating wealth or at the other end of the spectrum, high-net-worth individuals who need specialist support from our Private Clients team.