DIY assets £205bn and 'Solutions' the one to watch
This week Boring Money launched our Online Investing Report 2019. This report is an essential resource for anyone who needs to size the DIY investment market, understand UK consumer behaviour and sentiment, track investment journeys and best practice, benchmark providers and deliver a business case including projections and forecasts.
Building this picture of the online investing experience continues to be a frustrating experience as the J-curve remains elusive. We have been able to observe modest advances in growth but the Advice Gap remains the big fat elephant in the room. Yes, mobile apps are better, investment solutions are growing and average ages are coming down...But consumers lack confidence and providers continue to churn out jargon and talk products rather than needs.
Robo advice has had more than its 2% market share of column inches. However, looking at the investment journey from the client perspective, it is pretty hard to articulate the difference between a journey on Nutmeg or Wealthify to that on a traditional platform offering an in-house multi-asset solution. You pick a risk profile, press a button and out pops a “Here's one I made earlier”.
At this stage it’s hard to argue that robo advice indicates much more than a shorter corporate existence and a funky website which is not navy blue. It’s arguably a tweak to traditional distribution models rather than full-frontal innovation.
We think it more interesting to segment the market into DIY Solutions and DIY Choice. Total DIY assets in the UK were £206 billion after the admittedly poor quarter that was Q4 2018. If we look at today’s robos but also add to this the in-house multi-asset fund sales of platforms and new bank propositions, this adds up to £33 billion today. Compared to £173 billion in DIY Choice.
Projecting the next three years is never easy. Especially in March 2019. But with a dollop of assumptions we forecast a DIY investing market of £305 billion by 2021. Of which we think £99 billion will be in DIY Solutions. Mass affluent success relies on solutions, convenience and enabling confident choices.
To read more about the why and the how; to understand what the market looks like today; to understand what changes customers want to see, what good practice looks like and what innovation the market is working up, and to read about our projection and forecasts, have a nosey at what the Online Investing Report 2019 will deliver via the button below.