This has probably been the most challenging year for structured products in Europe for a number of years. According to www.structuredretailproducts.com, sales across the Continent have fallen by a third since last year. This pattern has been repeated in the UK where new reported volumes have fallen back to just over £6 billion. The last time we saw figures this low was in 2005!
The same story is true for the investment industry as a whole as providers and distributors prepare for new regulations and investors hold back from spending and long term saving. According to figures from the Investment Management Association, UK retail fund sales for the first three-quarters of 2012 are nearly 40% down as compared with the same period last year.
Last Christmas, Skandia and I were preparing to part company on good terms. Sadly, I know that a number of people across the industry have had similar conversations this year.
My old firm RBS has been through a lot of changes over the last year as it refocuses it’s businesses. It is not the only financial institution that has had to take some difficult decisions as sales have declined. That said, according to SRP, the volumes for RBS custom made indices have remained stable in absolute terms and their market share has grown from 10% to 15% in 2012. I am sure that the “big beasts” of the industry who achieved so much at the Royal Bank will return to the market soon. On a brighter note, I recently bumped into a former RBS colleague who continues to thrive there and is optimistic about the future. I wish her, RBS and indeed every SP team across the industry well for the year ahead.
I have been fortunate enough to be able to realise my goal of moving into consulting. I am not alone as a number of industry players are treading the same path!
On another positive note, sales of RPI linked products also remained at the same levels as last year. Hence, it is not surprising that this web site reports that the best selling products in 2012 from Legal & General, the Post Office and Santander are all linked to the RPI. Whilst the FTSE 100 Index has increased it’s share as a single underlying asset from 45% to 50%, it is still not quite the racing certainty that some people think that it is! Which, is a good thing for an industry that quite rightly preaches the benefits of diversification.
As we approach Christmas it is time to focus our attention on the important people, our families and friends! Also to remember those who are less fortunate than we. I am looking forward to the holiday season and hope you are too.
I wish everyone a Merry Christmas!