Personal Finance: `I Think Banks Are Letting a Few Cats out of the Bag. like Saying People Are Tired of Talking to a Call Centre'
Willcock, John, The Independent (London, England)
ALL OF a sudden, it seems, every high-street institution in the land is launching a "private bank" or "wealth management service" for a mysterious new entity - the "mass affluent."
On Monday, Alliance & Leicester announced it will be launching an internet- based wealth management service for the mass affluent next year. On Tuesday, Abbey National launched Inscape, a portfolio management service for people with at least pounds 50,000 in liquid assets.
A week earlier Credit Suisse unveiled a web portal targeted at savers with over pounds 30,000 to invest. Halifax is launching a private bank next year using its majority-owned life assurance subsidiary St James's Place Capital. NatWest launched its NatWest Private Banking in October for those with over pounds 75,000 to invest.
Abbey estimates there are over four million people with at least pounds 50,000 in liquid assets in the UK, 1 in 12 of the British adult population, and it forecasts that this group is set to grow by 9 per cent a year. This potential market is worth pounds 600 billion. Quite a prize to fight for, then. But who are the mass affluent? Where have they sprung from?
The finance industry defines them as people with cash to invest of over pounds 30,000-pounds 50,000, but who do not consider themselves "rich" in the traditional sense. That total does not include their house or personal pensions they may hold. They may not realise just how big a cash-pile they have accumulated, through inheritance, building society demutualisations, successful stock market investments and so on.
It may not surprise you to learn that almost two-thirds of the UK's mass affluent are men and are concentrated in the 45-64 age group.
According to the Abbey and A&L, these "mass affluent" are distrustful of the impartiality of independent financial advisers (IFAs) who earn so much of their income from commissions on the financial products they sell. …