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View the article online at http://citywire.co.uk/wealth-manager/article/a741964

Pensions shock creates major opportunity for wealth & fund firms

by Dylan Lobo on Mar 20, 2014 at 14:49

He also points out that Aberdeen’s acquisition of Scottish Widows Investment Partnership (Swip) now looks to be a particularly shrewd move, with the firm becoming a top player in the UK retail market.

‘The Swip transaction give Aberdeen the diversification it needs: exposure to UK and European equities and sterling fixed income, greater scale in property, access to retail investors, and a substantially reduced reliance on emerging markets and Asia Pacific equities,’ Lenardos said.  

‘In addition Aberdeen becomes the ‘exclusive service provider’ to Lloyds Wealth as there is an investment services agreement with an initial term of eight years.’

NISA Opportunity

Fund managers got an additional Budget boost from an increase in the ISA limit from £11,520 to £15,000 and their repackaging as New ISAs (NISA)

While ISAs represented around 10% of UK fund sales in 2012 and 2013, Middleton and Roger describe this as a ‘modest positive’ for fund managers with large UK businesses, highlighting that the higher limits for cash NISAs may attract more people to this type of product.

‘According to the IMA, the 10 largest market shares are Invesco Perpetual, M&G, BNY Mellon, Threadneedle, Schroders, Jupiter, Fidelity, Henderson, St James’s Place and Legal & General. These would, presumably, be potential beneficiaries from the higher limit.'

In a statement following the Budget, Jupiter chief executive Maarten Slendebroek welcomed the wide-ranging changes.

‘This is the first Budget for some time that has savers’ interests at its heart,’ Slendebroek said.

‘The measures to simplify ISAs and the increase in the overall limit to £15,000, together with the substantial reforms announced to the pension system, will transform the long term savings landscape, giving savers the flexibility to plan appropriately for the future at a time life expectancy is increasing.’

Bridging the advice gap

Meanwhile news the government was making £20 million available over the new two years to counter the growing advice gap is potentially a lucrative development for wealth firms.

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