Page 4 - peterevans Newsletter Q2 1014
P. 4

The investment landscape in 2014

There have been at least two welcome pieces of news 

in 2014 in the UK investment landscape; a reported 
growth in the number of investment advisers (albeit 

non-aligned with banks) and an increased allowance 

for investment in Individual Savings Accounts 

Concerns over the impact of the Retail Distribution 

Review (RDR) had been voiced by the Treasury Select 
Committee, when it interviewed Martin Wheatley, the 

chief executive of UK market regulator the Financial 

Conduct Authority (FCA), in February. A fall in the 
number of investment advisers had been reported, 

triggered by banks who were no longer able to make the 

economics work by providing advice based on a fee 
structure rather than commission.

The FCA had found that – excluding bank advisers – the 
total number had increased from just over 20,000 to 

nearly 22,000 from December 2013 to January 2014. 

As Wheatley noted, “[Banks] failed but other people 
are finding a way to do it.”

On top of this growth, the announcement that ISAs will 
now have a £15,000 limit from July 2014, matched with 

the continuing low interest rates may well see more 

savers choosing to invest in securities. This could 
provide a welcome flood of income for brokers and 

investment firms targeting individual investors.

As stock broker Hargreaves Landsdown noted in its 

interim report on 16 April 2014 “The changes announced 

represent a sea change in opportunity, with exceptional 
reform of pensions, a higher ISA limit and more 

simplicity... We may now find that there is more 

enthusiasm about retail investing, something [we have] 

long campaigned for”.

Some brokers, have invested in the development of a 

value-added service offering, in the form of validated 
peer-to-peer information sharing. Many investment sites 

carry message boards, but without any validation of the 

other participants, investors have no way of knowing the 
value of information being shared. The inclusion of a trust 

measurement between investors could allow a significant 

uptake in the usefulness of these peer-to-peer tools, 
filling a gap where professional advice is still lacking.

Alternatively, partnering with independent financial 
advisers could allow execution-only brokers to channel 

the increased trading volumes that are likely to result 

from George Osborne’s generosity. Either way, 

opportunity knocks.

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