Italian Financial Advice Market

Italian Financial Advice Market published by Datamonitor in October, 2009. This report consists of 30 pages and the price starts from US $ 1695.

Introduction

Abstract

Introduction

The recession is causing investors to seek advice, and FS providers are focusing their attention on their advisory models.

Scope of this research

• Structure of the Italian advisory market including distribution data.
• HNW investors' views of, and use of, financial advice based on Datamonitor' s proprietary survey
• Italian consumers' trust in banks and independent financial advisors based on results from Datamonitor' s proprietary survey.
• Regulatory environment for financial advice in Italy.

Research and analysis highlights

The more traditional channels, such as banks and post offices, make up the most significant distribution of both mutual funds and life insurance/pension premiums. Banks account for 65% of the distribution of mutual funds in Italy and 68% of life insurance/pension premiums.

Consumers are beginning to see the peace of mind guaranteed by a financial advisor that has only the interests of his client in mind. Misaligned incentives provided through the kickback system lead to malcontent consumers holding unsuitable products.

Over 35% of wealth managers in Italy believe that talking to customers more is one of the best techniques of increasing client retention. Through increased interaction with clients, wealth managers can gain a better understanding of their specific clients' needs.

Key reasons to purchase this research

• Understand the structure of the Italian financial advice market, and the broader financial services distribution channels.
• Gain an insight into what customers are demanding from their financial advisors, both now and in the future.
• Find out what impact regulation has had on the financial advice market landscape in Italy.

Table of Contents

OVERVIEW

• Catalyst
• Summary

EXECUTIVE SUMMARY

• Market Structure
• Regulatory Developments
• Customer Demands

MARKET STRUCTURE

• The financial advisory distribution channel in Italy is fairly large in comparison to other EU countries and is comprised of mainly non-independent financial advisors
  • Bancassurers are the most important channel for provision of advice in the Italian market
  • The Italian financial advice market has a unique shape compared to the rest of Europe

• Italy' s financial intermediary market is fairly developed but in the main controlled by banks and their intermediaries
  • Italy has a medium sized financial intermediary market, including 60,000 financial advisors
  • Traditional distribution channels are dominant in both mutual fund distribution and the life insurance market
  • Multi-tied advisors account for three quarters of financial advisors in Italy

REGULATORY DEVELOPMENTS

• Consob is the main body regulating financial advisors in the Italian market
  • Consob attempts to level the playing field between structured products and mutual funds
  • The Bank of Italy also has a role to play in regulation of the financial markets
  • ANASF is a professional association representing Italian financial advisors
  • NAFOP is Italy' s national association representing “fee-only” advisors
  • The numerous associations and overlapping roles of regulators have created a confusing regulatory environment in Italy

• The European Commission has introduced a number of regulatory reforms affecting the financial advice distribution channel in Italy in recent years
  • (Untitled sub-section)

SERVICING CUSTOMERS

• Italian HNWs have a higher than average appetite for risk and a weaker understanding of current market conditions
  • Italian consumers need guidance so as to better understand the market and to better align their risk appetites
  • Tax advice, simple transparent investments and asset preservation top the list of consumer demands today

• HNW demands for the future revolve around a range of investments
  • Tax advice remains a priority, joined by foreign currency investments and capital protected funds
  • The competition between funds and structured products remains complicated

• Increased communication and a holistic financial planning service are essential for increasing wallet share and customer retention
  • Increased face to face contact and financial planning provision drive customer wallet share
  • Advice from the wealth managers: communication and a selection of products are the most effective means of retaining clients

• Italy' s retail customers are unconvinced by professional financial advice

APPENDIX

• Definitions
• Methodology
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: Market share breakdown by type of intermediary: Italy vs. European Average*
• Table: Branches per thousand members of the population

FIGURES

• Figure: Italy has 60,000 financial intermediaries with just over 2,000 other intermediaries
• Figure: Traditional Channels like banking, post offices etc remain dominant in both mutual fund and life insurance distribution
• Figure: The Italian financial intermediary market is dominated by multi-tied agents
• Figure: Italian HNWs have a slightly higher than average appetite for risk , dangerously paired with a lower understanding of the effects of market conditions
• Figure: Italian consumers are more interested in face to face relationship management than their European neighbors
• Figure: Simple investments, asset preservation and tax advice are chief among HNW demands
• Figure: Tax advice , foreign currency investments and capital protected funds will be the chief demands in two years time
• Figure: Increased face to face contact and financial planning are crucial for increasing wallet share, both in Italy and abroad
• Figure: Increased communication and expansion of product range are the keys to customer retention in the Italian advice market
• Figure: Less than 30% of Italian consumers choose not to seek out professional advice before making financial decisions
• Figure: 43% of consumers seek professional advice from their primary bank versus 24% who disagree
• Figure: Italian investors follow the global average in seeking better options elsewhere
• Figure: Italian consumers are more distrustful of financial advisors/brokers than the global average

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