Online investing market increases by 15% in the 12 months to Q1 2018

In our latest quarterly update, the online investing market has increased to £209bn at the end of Q1 2018, a 14.2% increase from Q1 2017. This compares to an insignificant 0.2% increase in the FTSE 100 over the same period.

 

Customer accounts continue to increase and stand at 4.2 million accounts at the end of Q1 2018, increasing from 3.5 million accounts at the end of Q1 2017. However, we estimate that these accounts are held by just under 3.8 million adults.

 

Average account sizes fell between Q1 2017 to Q1 2018 and are now at £49,000, this is in part due to younger investors with lower balances entering the market. As a result, the average age of investors continues to creep downwards, falling to 48 years old at the end of Q1 2018.

 

Predictably, the industry continues to be male dominated – however we are seeing more women investing, and they now represent 37% of customers. This is in large part due to the providers who have acquired customers via workplace pensions where the gender split is more even.

 

Hargreaves Lansdown, Interactive Investor, Fidelity, and Barclays Smart Investor are the 4 largest players in the market with a combined market share of 42%. And Hargreaves Lansdown maintains a market share of 42%.

 

Robo advice continues to grow with customer numbers increasing by just under 200% in the 12 months to Q1 2018. Nonetheless, the market share of robo advisors remains small at just 1% of the D2C market. We are also seeing an increase in flows to ‘ready-made’ solutions offered by traditional investment platforms.

 

We continue to see increased activity amongst banks, with movements towards automated advice propositions and double-digit growth in customer accounts in the 12 months to Q1 2018.

 

Overall there are positive signs across the D2C market. Higher customer numbers, AUA outstripping growth in the FTSE 100, a younger audience investing and increases (although marginal) in female investors.

 

Our Q1 data will be released in full next week and can be accessed alongside our further insights on the D2C market and providers, via our online data tool POD at www.boringmoneybusiness.co.uk/about-pod/ and access the free summary page which we update on a quarterly basis.

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