The economic cycle we find ourselves in has challenged the savings industry. There is not a great deal of new money comming into the market. With falling portflio valuations, and nightmare economic scenarions being played out it is hardly surprising.
A beam of hope for the industry is in the massive book of untapped value in legacy assets. These are assets in which there is no active advice being performed for the clients interest. There is a further argument that states that TCF disciplines are not being performed on these clients.
Let’s look at the size of the opportunity. There are about 24,000 advisers in the UK, each with an average of £15 million AUM. Effectively this means there are £350 billion of AUM through the advice channel. It is calculated that active advice is being performed on £150 billio (i.e. those assets that have migrated to a platfrom). This leaves £210 billion as legacy assets.
The challenge now is how to create a process that is industrialised enough to provide business intelligence to present convincing arguemtns for migration of legacy assets into an environment that is being actively managed and enhanced.